def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission |
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Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under Rule 14a-12 |
AGCO
CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
April 22, 2010
The Annual Meeting of Stockholders of AGCO Corporation will be
held at the offices of the Company, 4205 River Green Parkway,
Duluth, Georgia 30096, on Thursday, April 22, 2010, at
9:00 a.m., local time, for the following purposes:
1. To elect four directors to the Board of Directors for
terms expiring at the Annual Meeting in 2011;
2. To ratify the appointment of KPMG LLP as the
Companys independent registered public accounting firm for
2010; and
3. To transact any other business that may properly be
brought before the meeting.
The Board of Directors has fixed the close of business on
March 12, 2010 as the record date for the determination of
stockholders entitled to notice of and to vote at the meeting. A
list of stockholders as of the close of business on
March 12, 2010 will be available for examination by any
stockholder at the Annual Meeting itself as well as for a period
of ten days prior to the Annual Meeting at our offices at the
above address during normal business hours. Attendance and
voting at the Annual Meeting is limited to stockholders of
record at the close of business on March 12, 2010 and to
any invitees of the Company.
We urge you to mark and execute your proxy card and return it
promptly in the enclosed envelope. In the event you are able to
attend the meeting, you may revoke your proxy and vote your
shares in person.
By Order of the Board of Directors
DEBRA E. KUPER
Corporate Secretary
Atlanta, Georgia
March 22, 2010
TABLE
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AGCO
CORPORATION
PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
April 22, 2010
This proxy solicitation is made by the Board of Directors of
AGCO Corporation, which has its principal executive offices at
4205 River Green Parkway, Duluth, Georgia 30096. By signing and
returning the enclosed proxy card, you authorize the persons
named as proxies on the proxy card to represent you at the
meeting and vote your shares.
If you attend the meeting, you may vote by ballot. If you are
not present at the meeting, your shares can be voted only when
represented by a proxy either pursuant to the enclosed proxy
card or otherwise. You may indicate a vote on the enclosed proxy
card in connection with the election of directors or for or
against the other proposals on the proxy card and your shares
will be voted accordingly. If you indicate a preference to
abstain from voting, no vote will be recorded. You may withhold
your vote from any nominee for director by marking the
Withhold box across from his name on the proxy card.
You may revoke your proxy card before balloting begins by
notifying the Corporate Secretary in writing at 4205 River Green
Parkway, Duluth, Georgia 30096. In addition, you may revoke your
proxy card before it is voted by signing and duly delivering a
proxy card bearing a later date or by attending the meeting and
voting in person. If you return a signed proxy card that does
not indicate your voting preferences, the persons named as
proxies on the proxy card will vote your shares in favor of all
of the four nominees described below, in favor of ratification
of the appointment of KPMG LLP as the Companys independent
registered public accounting firm for 2010, and in their best
judgment with respect to any other business brought before the
Annual Meeting.
The enclosed form of proxy card is solicited by the Board of
Directors of the Company, and the cost of solicitation of proxy
cards will be borne by the Company. The Company may retain an
outside firm to aid in the solicitation of proxy cards, the cost
of which the Company expects would not exceed $25,000. In order
to ensure that a quorum is represented by proxies at the
meeting, proxy solicitation also may be made personally or by
telephone by officers or employees of the Company, without added
compensation. The Company will reimburse brokers, custodians and
nominees for their expenses in forwarding proxy material to
beneficial owners.
This proxy statement and form of proxy card are first being sent
to stockholders on or about March 22, 2010. The
Companys 2009 Annual Report to its stockholders and its
Annual Report on
Form 10-K
for 2009 also are enclosed and should be read in conjunction
with the matters set forth herein.
INFORMATION
REGARDING VOTING
Only stockholders of record as of the close of business on
March 12, 2010 are entitled to notice of and to vote at the
Annual Meeting. On March 12, 2010, the Company had
outstanding 92,603,799 shares of Common Stock, each of
which is entitled to one vote on each matter coming before the
meeting. No cumulative voting rights exist, and dissenters
rights for stockholders are not applicable to the matters being
proposed. For directions to the offices of the Company where the
Annual Meeting will be held, you may contact our corporate
office at
(770) 813-9200.
Quorum
Requirement
A quorum of the Companys stockholders is necessary to hold
a valid meeting. The Companys By-Laws provide that a
quorum is present if a majority of the outstanding shares of
Common Stock of the Company entitled to vote at the meeting are
present in person or represented by proxy. Votes cast by proxy
or in person at the Annual Meeting will be tabulated by the
inspector of elections appointed for the meeting, who also will
determine whether a quorum is present for the transaction of
business. Abstentions and broker non-votes will be
treated as shares that are present and entitled to vote for
purposes of determining whether a quorum is present. A broker
non-vote occurs
on an item when a broker is not permitted to vote on that item
without instruction from the beneficial owner of the shares and
no instruction is given.
Vote
Necessary for the Election of Directors
Directors are elected by a plurality of the shares of Common
Stock actually voted (in person or by proxy) at the Annual
Meeting. Withheld votes, abstentions and broker non-votes have
no effect. Under the New York Stock Exchange (NYSE)
rules as revised for annual meetings held in 2010 and after, if
your broker holds your shares in its name, your broker is not
permitted to vote your shares with respect to the election of
directors if your broker does not receive voting instructions
from you.
Vote
Necessary for the Ratification of the Appointment of Independent
Registered Public Accounting Firm
The ratification of the appointment of KPMG LLP as the
Companys independent registered public accounting firm for
2010 will be approved if a majority of the number of shares of
the Companys Common Stock that are present (in person or
by proxy) at the Annual Meeting and entitled to vote thereon are
voted in favor of ratification. Abstentions will be counted in
determining the minimum number of affirmative votes required for
approval and, accordingly, will have the effect of a vote
against ratification. Broker non-votes will not be counted as
votes for or against ratification.
Other
Matters
With respect to any other matter that may properly come before
the Annual Meeting for stockholder consideration, a matter
generally will be approved if a majority of the number of shares
of the Companys Common Stock that are present (in person
or by proxy) at the Annual Meeting and entitled to vote thereon
are voted in favor of the matter. Abstentions will be counted in
determining the minimum number of affirmative votes required for
approval thereof and, accordingly, will have the effect of a
vote against any such matter. Broker non-votes will not be
counted as votes for or against other matters presented for
stockholder consideration.
Important
Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to Be Held on April 22, 2010
As required by rules adopted by the United Stated Securities and
Exchange Commission (SEC), the Company is making
this proxy statement and its annual report available to
stockholders electronically via the Internet. The proxy
statement and annual report to stockholders are available at
www.agcocorp.com. The proxy statement is available under
the heading SEC Filings in the Investors
section, and the annual report to stockholders is available
under the heading Annual Reports in the
Investors section.
PROPOSAL NUMBER
1
ELECTION
OF DIRECTORS
In March 2010, the Board amended the Companys By-Laws to
declassify the Board and provide for the annual election of all
directors. The elimination of the classified structure will
become effective for each director upon the expiration of the
directors current term, beginning with the four nominees
named below, each of whom was a former Class III director.
The directors who have been elected to three-year terms prior to
the effectiveness of the amendment will complete those terms,
such that the terms of the former Class I and Class II
directors will expire at the 2011 and 2012 Annual Meetings,
respectively. Beginning with the 2012 Annual Meeting, the entire
Board will be elected annually to serve for one-year terms or
until their successors have been duly elected and qualified. For
this years Annual Meeting, the Governance Committee has
recommended, and the Board of Directors has nominated, the four
individuals named below to serve as directors until the Annual
Meeting in 2011 or until their successors have been duly elected
and qualified.
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The following is a brief description of the business experience,
qualifications and skills of each of the four nominees for
directorship:
Francisco R. Gros, age 67, has been a director of
the Company since October 2006. Mr. Gros was President and
Chief Executive Officer of OGX Petroleo e Gas from 2007 to 2008,
and is now the Vice Chairman of the Board of Directors.
Mr. Gros also served as President and Chief Executive
Officer of Fosfertil S.A., a company involved in the chemical,
fertilizer and logistics industries in Brazil, from 2003 to
2007. Prior to that, Mr. Gros was President and Chief
Executive Officer of Petróleo Brasileiro S.A. from January
2002 to December 2002, and President and Chief Executive Officer
of the Brazilian Development Bank from 2000 to 2001. In
addition, Mr. Gros was also a Managing Director of Morgan
Stanley from 1993 to 2000, and was Governor of the Central Bank
in 1987 and again from 1991 to 1992. Mr. Gros is also the
Chairman of the Board for Wilson Sons Ltd., and serves on the
Boards of Lojas Renner S.A., Globex Utilidades S.A., Fosfertil
S.A., Energias do Brasil S.A. and Wellstream Holdings PLC. As a
former Chief Executive Officer of a large overseas company,
Mr. Gros brings leadership and diversity to the Board of
Directors as well as considerable international business
experience, particularly in Brazil. His knowledge of financial
capital markets and expertise with mergers and acquisitions
complements a highly skilled Board.
Gerald B. Johanneson, age 69, has been a director of
the Company since April 1995. Until his retirement in 2003,
Mr. Johanneson had been President and Chief Executive
Officer of Haworth, Inc. since 1997. He served as President and
Chief Operating Officer of Haworth, Inc. from 1994 to 1997 and
as Executive Vice President and Chief Operating Officer from
1988 to 1994. Mr. Johanneson currently serves on the Board
of Haworth, Inc. Mr. Johanneson brings to the Board of
Directors a wealth of knowledge of sales and marketing strategy
in the manufacturing industry. His background as both a Chief
Executive Officer and Chief Operating Officer of a global
company lends a unique perspective to the Board. Further,
Mr. Johannesons tenure provides consistent leadership
to the Board and a familiarity with the Companys
operations.
George E. Minnich, age 60, has been a director of
the Company since January 2008. Mr. Minnich served as
Senior Vice President and Chief Financial Officer of ITT
Corporation from 2005 to 2007. Prior to that, he served in
several senior finance positions at United Technologies
Corporation, including Vice President and Chief Financial
Officer of Otis Elevator from 2001 to 2005 and Vice President
and Chief Financial Officer of Carrier Corporation from 1996 to
2001. He also held various positions within Price Waterhouse
from 1971 to 1993, serving as an Audit Partner from 1984 to
1993. Mr. Minnich also serves on the Board of Trustees of
Albright College and the Boards of Kaman Corporation and
Guilford Mills, Inc. Mr. Minnich, through his background as
a former Chief Financial Officer of a publicly-traded company,
provides the Board of Directors with substantial financial
expertise. He also brings to the Board a familiarity with the
challenges facing large, international manufacturing companies.
Curtis E. Moll, age 70, has been a director of the
Company since April 2000. Mr. Moll has been Chairman of the
Board and Chief Executive Officer of MTD Holdings, Inc., a
global manufacturing corporation, since 1980. He joined MTD
Products Inc. as a project engineer in 1963. Mr. Moll is
also Chairman of the Board of Shiloh Industries and serves on
the Board of the Sherwin-Williams Company. Mr. Molls
significant management expertise in a global setting brings a
wide range of experience to the Board of Directors, especially
in the areas of human resources, sales and marketing, and supply
chain and logistics. His tenure with the Board also provides
stability and a familiarity with the Companys operations.
The four nominees who receive the greatest number of votes cast
for the election of directors at the Annual Meeting shall become
directors at the conclusion of the tabulation of votes.
The Board of Directors recommends a vote FOR the nominees set
forth above.
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DIRECTORS
CONTINUING IN OFFICE
The seven individuals named below are now serving as directors
of the Company with terms expiring at the Annual Meetings in
2011 and 2012, as indicated.
The following is a brief description of the business experience,
qualifications and skills of each of the Directors who are
continuing in office as directors whose terms expire at the
Annual Meeting in 2011:
Herman Cain, age 64, has been a director of the
Company since December 2004. Mr. Cain has also served as
the Chairman of T.H.E. New Voice, a leadership and consulting
firm that he founded, since 2004. Mr. Cain hosts a
nationally syndicated radio show focusing on current political
and economic events. Prior to that, he was the Chairman of The
Federal Reserve Bank of Kansas City, from 1995 to 1996, and a
Member from 1992 to 1994. Mr. Cain served as the Chief
Executive Officer and President of the National Restaurant
Association from 1997 to 1999 and as Chairman and Chief
Executive Officer of Godfathers Pizza, Inc. from 1988 to
1996. From 1977 to 1988, Mr. Cain served in various
positions with The Pillsbury Company and Burger King
Corporation. Mr. Cain also serves on the board of Whirlpool
Corporation. Mr. Cain brings to the Board of Directors
extensive managerial and manufacturing experience from his
service as a former Chief Executive Officer. His substantial
insight into political and economic affairs and his civic
involvement also lend diversity and regional representation to
the Board.
Wolfgang Deml, age 64, has been a director of the
Company since February 1999. Until his retirement in 2008,
Mr. Deml had been President and Chief Executive Officer of
BayWa Corporation, a trading and services company located in
Munich, Germany, since 1991. Mr. Deml is currently a member
of the Supervisory Board of Mannheimer Versicherung AG.
Mr. Deml adds a wealth of experience to the Board of
Directors given his service as the Chief Executive Officer of an
international corporation within our industry. His tenure on our
Board provides consistent leadership, and he serves as an
ongoing source for industry-specific knowledge, especially in
Germany, where our Fendt factory is located.
Thomas W. LaSorda, age 55, has been a director of
the Company since December 2009. Until his retirement in 2009,
Mr. LaSorda served as Vice Chairman, President and a member
of the Board of Managers of Chrysler LLC since 2007. He was
President and Chief Executive Officer of Chrysler Group from
2005 to 2007 and Chief Operating Officer and a member of the
Board of Management of DaimlerChrysler AG from 2004 to 2005.
Prior to that, Mr. LaSorda served for 23 years in
various positions with General Motors, including as Vice
President, Quality, Reliability & Competitive
Operations Implementation for GM North America, from 1998 to
2000, and as President of Opel Eisenach GmbH, Germany, from 1991
to 1993. Mr. LaSorda is currently serving on the Boards of
Husky Injection Molding Systems Ltd. and ALTe LLC.
Mr. LaSorda brings substantial manufacturing and quality
control experience to the Board of Directors, especially
regarding the challenges faced by large, multi-national public
companies. His proven leadership as a Chief Executive Officer
and as a Chief Operating Officer provides the Board with a
focused perspective on manufacturing and operational issues.
Martin H. Richenhagen, age 57, has been Chairman of
the Board of Directors since August 2006 and has served as
President and Chief Executive Officer of the Company since July
2004. Mr. Richenhagen is currently a member of the Board,
Audit and Technology & Environment Committees for PPG
Industries, Inc., a leading coatings and specialty products and
services company. From 2003 to 2004, Mr. Richenhagen was
Executive Vice President of Forbo International SA, a flooring
material business based in Switzerland. From 1998 to 2002,
Mr. Richenhagen was Group President of Claas KGaA mbH, a
global farm equipment manufacturer and distributor. From 1995 to
1998, Mr. Richenhagen was Senior Executive Vice President
for Schindler Deutschland Holdings GmbH, a worldwide
manufacturer and distributor of elevators and escalators. In
addition to his six years of experience as the Companys
Chief Executive Officer, Mr. Richenhagen brings to the
Board of Directors substantial experience in the agricultural
equipment industry. His business and leadership acumen as both a
former Executive Vice President and current Chief Executive
Officer provides the Board with an informed resource for a wide
range of disciplines, from sales and marketing to strategic
acquisitions.
The following is a brief description of the business experience,
qualifications and skills of each of the Directors who are
continuing in office as directors whose terms expire at the
Annual Meeting in 2012:
P. George Benson, Ph.D, age 63, has been a director
of the Company since December 2004. Mr. Benson is currently
President of the College of Charleston in Charleston, South
Carolina, serving in that position since 2007,
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and he has been a member of the Board of Directors and Audit
Committee Chair for Nutrition 21, Inc., since 1998 and 2002,
respectively. He also has been a member of the Board of
Directors of Crawford & Company (Atlanta, Georgia)
since 2005 and of the National Bank of South Carolina since
2007. Mr. Benson was a judge for the Malcom Baldrige
National Quality Award from 1997 to 2000 and was Chairman of the
Board of Overseers for the Baldrige Award from 2004 to 2007. He
currently serves on the Board of Directors for the Foundation
for the Baldrige Award. From 1998 to 2007, Mr. Benson was
the Dean of the Terry College of Business at the University of
Georgia. From 1993 to 1998, he served as Dean of the Rutgers
Business School at Rutgers University. Prior to that,
Mr. Benson was on the faculty of the Carlson School of
Management at the University of Minnesota from 1977 to 1993
where he served as Director of the Operations Management Center
from 1992 to 1993 and head of the Decision Sciences Area from
1983 to 1988. Mr. Benson has significant academic expertise
in business, in particular with organizational management
systems, and adds a valuable perspective to the Board of
Directors, especially in the area of improving the delivery of
products and services. His ties to the community provide the
Board with regional representation and a critical link to the
academic and research sectors.
Gerald L. Shaheen, age 65, has been a director of
the Company since October 2005. Until his retirement from
Caterpillar Inc. in January 2008, Mr. Shaheen held numerous
marketing and general management positions, both in the United
States and Europe. Most recently from 1998 to 2008,
Mr. Shaheen served as a Group President. Mr. Shaheen
is the Chairman of the Board of Trustees of Bradley University
and a Board member and past Chairman of the U.S. Chamber of
Commerce. He is also a Board member of the National Chamber
Foundation, the Ford Motor Company, Peoria Next and the National
Multiple Sclerosis Society, Greater Illinois Chapter.
Mr. Shaheens background in management of a global
heavy equipment manufacturer brings to the Board of Directors
particular knowledge of the Companys industry, as well as
a necessary perspective of the challenges facing large,
publicly-traded companies. His work with the U.S. Chamber
of Commerce also provides the Board with a wealth of knowledge
related to international commerce and trade issues.
Hendrikus Visser, age 65, has been a director of the
Company since April 2000. Mr. Visser is Chairman of Royal
Huisman Shipyards N.V. and serves on the Boards of Vion N.V.,
Friesland Bank N.V., Foundation OPG N.V., Sterling Strategic
Value, Ltd. and Teleplan International N.V. He was the Chief
Financial Officer of NUON N.V. and has served on the Boards of
major international corporations and institutions including
Rabobank Nederland, the Amsterdam Stock Exchange, Amsterdam
Institute of Finance and De Lage Landen. Mr. Vissers
substantial experience with and knowledge of financial capital
markets, particularly in our Europe/Africa/Middle East
(EAME) region, provides the Board of Directors with
significant international financial expertise. His tenure with
the Board also provides stability in leadership, and he serves
as a continued source of regional diversity.
BOARD OF
DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD
During 2009, the Board of Directors held 6 meetings. The Company
holds executive sessions of its non-management directors at each
regular meeting of its Board of Directors. Mr. Richenhagen,
who is also the Chief Executive Officer of the Company, serves
as Chairman of the Board, and Mr. Johanneson serves as Lead
Director of the Board. As Lead Director, Mr. Johanneson,
who was elected unanimously to that position by the independent
directors, presides over executive sessions and at all meetings
of the Board of Directors in the absence of the Chairman,
provides input to the Chairman on setting Board agendas,
generally approves information sent to the Board (including
meeting schedules to assure sufficient discussion time for all
agenda items), ensures that he is available for consultation and
direct communication at the request of major shareholders and
has the authority to call meetings of the independent directors.
The Company believes that having the Chief Executive Officer
serve as Chairman is important because it best reflects the
Boards intent that the Chief Executive Officer function as
the Companys overall leader, while the Lead Director
provides independent leadership to the directors and serves as
an intermediary between the independent directors and the
Chairman. The resulting structure sends a message to our
employees, customers and stockholders that we believe in having
strong, unifying leadership at the highest levels of management,
but that we also value the perspective of our independent
directors and their many contributions to our Company.
The Company encourages stockholders and other interested persons
to communicate with Mr. Johanneson and the other members of
the Board of Directors. Any person who wishes to communicate
with a particular director or
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the Board of Directors as a whole, including the Lead Director
or any other independent director, may write to those directors
in care of Debra E. Kuper, Corporate Secretary, AGCO
Corporation, 4205 River Green Parkway, Duluth, Georgia 30096.
The correspondence should indicate the writers interest in
the Company and clearly specify whether it is intended to be
forwarded to the entire Board of Directors or to one or more
particular directors. Ms. Kuper will forward all
correspondence satisfying these criteria.
In accordance with the rules of the NYSE, the Companys
Board of Directors has adopted categorical standards to assist
it in making determinations of its directors independence.
The Board of Directors has determined that in order to be
considered independent, a director must not:
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be an employee of the Company or have an immediate family
member, as that term is defined in the General Commentary
to Section 303A.02(b) of the NYSE rules, who is an
executive officer of the Company at any time during the
preceding three years;
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receive or have an immediate family member who receives or
solely own any business that receives during any twelve-month
period within the preceding three years direct compensation from
the Company or any subsidiary or other affiliate in excess of
$120,000, other than for director and committee fees and pension
or other forms of deferred compensation for prior service to the
Company or, solely in the case of an immediate family member,
compensation for services to the Company as a non-executive
employee;
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be a current partner or current employee of a firm that is the
internal or external auditor of the Company or any subsidiary or
other affiliate, or have an immediate family member that is a
current partner or current employee of such a firm who
personally works on an audit of the Company or any subsidiary or
other affiliate;
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have been or have an immediate family member who was at any time
during the preceding three years a partner or employee of such
an auditing firm who personally worked on an audit of the
Company or any subsidiary or other affiliate within that time;
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be employed or have an immediate family member that is employed
either currently or at any time within the preceding three years
as an executive officer of another company in which any present
executive officers of the Company or any subsidiary or other
affiliate serve or served at the same time on the other
companys Compensation Committee; and
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be a current employee or have an immediate family member that is
a current executive officer of a company that has made payments
to or received payments from the Company or any subsidiary or
other affiliate for property or services in an amount which, in
any of the preceding three fiscal years of such other company,
exceeds (or in the current fiscal year of such other company is
likely to exceed) the greater of $1.0 million or two
percent of the other companys consolidated gross revenues
for that respective year.
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In addition, in order to be independent for purposes of serving
on the Audit Committee, a director may not:
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accept any consulting, advisory or other compensatory fee from
the Company or any subsidiary; and
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be an affiliated person, as that term is used in
Section 10A(m)(3)(B)(ii) of the Securities Exchange Act of
1934 (the Exchange Act), of the Company or any of
its subsidiaries.
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Finally, in order to be independent for purposes of serving on
the Compensation Committee, a director may not:
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be a current or former employee or former officer of the Company
or an affiliate or receive any compensation from the Company
other than for services as a director;
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receive remuneration from the Company or an affiliate, either
directly or indirectly, in any capacity other than as a
director, as that term is defined in
Section 162(m) of the Internal Revenue Code of 1986
(IRC); and
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have an interest in a transaction required under SEC rules to be
described in the Companys proxy statement.
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These standards are consistent with the standards set forth in
the NYSE rules, the IRC and the Exchange Act. In applying these
standards, the Company takes into account the interpretations
of, and the other guidance available from, the NYSE.
6
Based upon the foregoing standards, the Board of Directors has
determined that all of its directors are independent in
accordance with these standards except for Mr. Richenhagen,
and that none of the independent directors has any material
relationship with the Company, other than as a director or
stockholder of the Company. Mr. Moll has a business
relationship with the Company as described under the caption
Certain Relationships and Related Party
Transactions. Mr. Moll serves as the Chairman of the
Board and Chief Executive Officer of MTD Holdings, Inc., which
is the parent company of MTD Products Inc. The Company receives
royalty payments from MTD Products Inc. resulting from its sales
of equipment to the Companys dealers. The Board of
Directors has determined that Mr. Molls relationship
is not material because the royalty payments received by the
Company during the preceding three fiscal years of MTD Products
Inc. did not exceed, and are not likely to exceed in the current
fiscal year of that company, the greater of $1.0 million or
two percent of that companys consolidated gross revenues.
The Board of Directors has adopted a policy that all directors
on the Board of Directors are expected to attend Annual Meetings
of the Companys stockholders. All of the directors on the
Board of Directors attended the Companys previous Annual
Meeting held in April 2009 except for Mr. Gros.
Director
Compensation
The following table provides information concerning the
compensation of the members of the Companys Board of
Directors for the most recently completed fiscal year. As
reflected in the table, each non-employee director received an
annual base retainer of $90,000 plus $90,000 in restricted
shares of the Companys Common Stock for Board service.
Committee chairmen received an additional annual retainer of
$10,000 (or $20,000 for the chairman of the Audit Committee and
$15,000 for the chairman of the Compensation Committee).
Mr. Johanneson, who is the Lead Director, also received an
additional annual $25,000 Lead Directors fee. The Company
does not have any consulting arrangements with any of its
directors.
2009
DIRECTOR COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
|
|
|
All Other
|
|
|
|
|
|
Paid in Cash
|
|
|
Stock
Awards(3)
|
|
|
Compensation
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
($)
|
|
|
Gerald B. Johanneson (Lead Director)
|
|
|
125,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
215,000
|
|
P. George Benson
|
|
|
100,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
190,000
|
|
Herman Cain
|
|
|
90,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
180,000
|
|
Wolfgang Deml
|
|
|
90,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
180,000
|
|
Francisco R. Gros
|
|
|
90,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
180,000
|
|
Thomas W.
LaSorda(1)
|
|
|
6,114
|
|
|
|
|
|
|
|
|
|
|
|
6,114
|
|
George E. Minnich
|
|
|
110,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
200,000
|
|
Curtis E. Moll
|
|
|
90,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
180,000
|
|
David E.
Momot(2)
|
|
|
83,886
|
|
|
|
90,000
|
|
|
|
|
|
|
|
173,886
|
|
Gerald L. Shaheen
|
|
|
105,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
195,000
|
|
Hendrikus Visser
|
|
|
90,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
980,000
|
|
|
$
|
900,000
|
|
|
|
$
|
|
|
$
|
1,880,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. LaSorda was appointed as a director effective
December 6, 2009. |
|
(2) |
|
Mr. Momot retired from the Companys Board of
Directors effective December 6, 2009. |
|
(3) |
|
The 2006 LTI Plan provided for annual restricted stock grants of
the Companys Common Stock to all non-employee directors.
For 2009, each non-employee director was granted $90,000 in
restricted stock. The shares are restricted as to
transferability for a period of three years following the award.
In the event a director departs from the Board, the
non-transferability period expires immediately. The 2009 annual
grant occurred on April 23, 2009. The total grant on
April 23, 2009 equated to 38,130 shares, or
3,813 shares per director. The amounts above reflect the
aggregate grant date fair value computed in accordance with
Financial Accounting |
7
|
|
|
|
|
Standards Board Accounting Standards Codification Topic 718,
Compensation-Stock Compensation (FASB ASC Topic
718). After shares were withheld for income tax purposes,
each director held the following shares as of December 31,
2009 related to this grant: Mr. Johanneson
2,670 shares; Mr. Benson
2,555 shares; Mr. Cain 2,288 shares;
Mr. Deml 2,288 shares;
Mr. Gros 2,669 shares;
Mr. Minnich 2,860 shares;
Mr. Moll 2,288 shares;
Mr. Momot 3,813 shares;
Mr. Shaheen 2,288 shares; and
Mr. Visser 2,669 shares. |
Committees
of the Board of Directors
The Board of Directors has delegated certain functions to the
following standing committees of the Board:
The Executive Committee is authorized, between meetings
of the Board, to perform all of the functions of the Board of
Directors except as limited by the General Corporation Law of
the State of Delaware or by the Companys Certificate of
Incorporation or By-Laws. The Executive Committee held no
meetings in 2009 and currently is comprised of
Messrs. Benson, Johanneson, Minnich, Richenhagen (Chairman)
and Shaheen.
The Audit Committee assists the Board of Directors in its
oversight of the integrity of the Companys financial
statements, the Companys compliance with legal and
regulatory requirements, the independent registered public
accounting firms qualifications and independence, and the
performance of the Companys internal audit function and
independent registered public accounting firm. The
Committees functions also include reviewing the
Companys internal accounting and financial controls,
considering other matters relating to the financial reporting
process and safeguarding the Companys assets, and
producing an annual report of the Audit Committee for inclusion
in the Companys proxy statement. The Audit Committee has a
written charter to govern its operations. The Audit Committee
held eight meetings in 2009 and currently is comprised of
Messrs. Benson, Gros, LaSorda, Minnich (Chairman), Moll and
Visser. The Board of Directors has determined that
Mr. Minnich is an audit committee financial
expert, as that term is defined under regulations of the
SEC. All of the members of the Audit Committee are independent
in accordance with the NYSE and SEC rules governing audit
committee member independence. The report of the Audit Committee
for 2009 is set forth under the caption Audit Committee
Report. The Companys management also maintains a
risk assessment process that identifies the risks that face the
Company that management considers the most significant. The risk
assessment process also considers appropriate strategies to
mitigate those risks. Management periodically meets with the
Companys Audit Committee and reviews such risks and
relevant strategies.
The Compensation Committee is charged with executing the
Board of Directors overall responsibility for matters
related to Chief Executive Officer and other executive
compensation, including assisting the Board of Directors in
administering the Companys compensation programs and
producing an annual report of the Compensation Committee on
executive compensation for inclusion in the Companys proxy
statement. The Compensation Committee has a written charter to
govern its operations. The Compensation Committee held six
meetings in 2009 and currently is comprised of
Messrs. Cain, LaSorda, Minnich, Moll and Shaheen
(Chairman). All of the members of the Compensation Committee are
independent in accordance with the NYSE, SEC and IRC rules
governing compensation committee member independence. The
Compensation Committee has retained Towers Watson to advise it
on current trends and best practices in compensation. The report
of the Compensation Committee for 2009 is set forth under the
caption Compensation Committee Report.
The Governance Committee assists the Board of Directors
in fulfilling its responsibilities to stockholders by
identifying and screening individuals qualified to become
directors of the Company, consistent with independence,
diversity and other criteria approved by the Board of Directors,
recommending candidates to the Board of Directors for all
directorships and for service on the committees of the Board,
developing and recommending to the Board of Directors a set of
corporate governance principles and guidelines applicable to the
Company, and overseeing the evaluation of the Board of Directors
and the Companys management. The Governance Committee has
a written charter to govern its operations. The Governance
Committee held ten meetings in 2009 and currently is comprised
of Messrs. Benson (Chairman), Deml, Gros, Johanneson and
Visser. All of the members of the Governance Committee are
independent in accordance with the NYSE rules governing
nominating/corporate governance committee member independence.
With respect to the committees evaluation of nominee
candidates, including those recommended by stockholders, the
committee has no formal requirements or minimum standards for
the individuals that are nominated.
8
Rather, the committee considers each candidate on his or her own
merits. However, in evaluating candidates, there are a number of
factors that the committee generally views as relevant and is
likely to consider to ensure the entire Board collectively
embraces a wide variety of characteristics, including:
|
|
|
|
|
career experience, particularly experience that is germane to
the Companys business, such as agricultural products and
services, legal, human resources, finance and marketing
experience;
|
|
|
|
experience in serving on other boards of directors or in the
senior management of companies that have faced issues generally
of the level of sophistication that the Company faces;
|
|
|
|
contribution to diversity of the Board of Directors;
|
|
|
|
integrity and reputation;
|
|
|
|
whether the candidate has the characteristics of an independent
director;
|
|
|
|
academic credentials;
|
|
|
|
other obligations and time commitments and the ability to attend
meetings in person; and
|
|
|
|
current membership on the Companys board our
board values continuity (but not entrenchment).
|
The committee does not assign a particular weight to these
individual factors. Similarly, the committee does not expect to
see all (or even more than a few) of these factors in any
individual candidate. Rather, the committee looks for a mix of
factors that, when considered along with the experience and
credentials of the other candidates and existing directors, will
provide stockholders with a diverse and experienced Board of
Directors. The committee strives to recommend candidates who
each bring a unique perspective to the Board in order to
contribute to the collective diversity of the Board. Although
the Company has not adopted a specific diversity policy, the
Board believes that a diversity of experience, gender, race,
ethnicity and age contributes to effective governance over the
affairs of the Company for the benefit of its stockholders. With
respect to the identification of nominee candidates, the
committee has not developed a formalized process. Instead, its
members and the Companys senior management generally
recommend candidates whom they are aware of personally or by
reputation or may utilize outside consultants to assist in the
process.
The Governance Committee welcomes recommendations for
nominations from the Companys stockholders and evaluates
stockholder nominees in the same manner that it evaluates a
candidate recommended by other means. In order to make a
recommendation, the committee requires that a stockholder send
the committee:
|
|
|
|
|
a resume for the candidate detailing the candidates work
experience and academic credentials;
|
|
|
|
written confirmation from the candidate that he or she
(1) would like to be considered as a candidate and would
serve if nominated and elected, (2) consents to the
disclosure of his or her name, (3) has read the
Companys Code of Conduct and that during the prior three
years has not engaged in any conduct that, had he or she been a
director, would have violated the Code or required a waiver,
(4) is, or is not, independent as that term is
defined in the committees charter, and (5) has no
plans to change or influence the control of the Company;
|
|
|
|
the name of the recommending stockholder as it appears in the
Companys books, the number of shares of Common Stock that
are owned by the stockholder and written confirmation that the
stockholder consents to the disclosure of his or her name. (If
the recommending person is not a stockholder of record, he or
she should provide proof of share ownership);
|
|
|
|
personal and professional references for the candidate,
including contact information; and
|
|
|
|
any other information relating to the candidate required to be
disclosed in solicitations of proxies for election of directors
or as otherwise required, in each case, pursuant to
Regulation 14A of the Exchange Act.
|
The foregoing information should be sent to the Governance
Committee,
c/o Debra
E. Kuper, Corporate Secretary, AGCO Corporation, 4205 River
Green Parkway, Duluth, Georgia 30096, who will forward it to the
chairperson of the committee. The advance notice provisions of
the Companys By-Laws provide that for a proposal to be
properly brought before a meeting by a stockholder, such
stockholder must disclose certain information and have given the
Company timely notice of such proposal in written form meeting
the requirements of the Companys
9
By-Laws no later than 60 days and no earlier than
90 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders. The committee does not
necessarily respond directly to a submitting stockholder
regarding recommendations.
The Succession Planning Committees function is to
ensure a continued source of capable, experienced managers is
present to support the Companys future success. The
Succession Planning Committee meets regularly with senior
members of management in an effort to assist executive
management in their plans for senior management succession, to
review the backgrounds and experience of senior management, and
to assist in the creation of tailored individual personal and
professional development plans. The Succession Planning
Committee has a written charter to govern its operations. The
Succession Planning Committee held six meetings in 2009 and
currently is comprised of Messrs. Cain, Deml, Johanneson
(Chairman), Richenhagen and Shaheen.
During fiscal 2009, each director attended at least 75% of the
aggregate number of meetings of the Board and respective
committees on which he served while a member thereof, with the
exception of Mr. Gros, who, due to scheduling conflicts,
attended 71% of the meetings.
We provide various corporate governance and other information on
the Companys website at www.agcocorp.com. This
information, which is also available in printed form to any
stockholder of the Company upon request to the Corporate
Secretary, includes the following:
|
|
|
|
|
our corporate governance guidelines and charters for the Audit,
Compensation, Governance and Succession Planning Committees of
the Board of Directors, which are available under the headings
Committee Guidelines and Committee
Charters, respectively, in the Corporate
Governance section of our websites
Investors section; and
|
|
|
|
the Companys Code of Conduct, which is available under the
heading Code of Conduct in the Corporate
Governance section of our websites
Investors section.
|
In addition, should there be any waivers of the Companys
Code of Conduct, those waivers will be available under the
heading Office of Ethics and Compliance in the
Corporate Governance section of our websites
Investors section.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2009, Messrs. Cain, Minnich, Moll, Momot and
Shaheen (Chairman) served as members of the Compensation
Committee. Mr. Momot retired from the Companys Board
of Directors effective December 6, 2009. No member of the
Compensation Committee was an officer or employee of the Company
or any of its subsidiaries during fiscal 2009. Mr. Moll had
a business relationship with the Company during the fiscal year
2009 as described under the caption Certain Relationships
and Related Party Transactions.
PROPOSAL NUMBER
2
RATIFICATION
OF COMPANYS INDEPENDENT REGISTERED
PUBLIC
ACCOUNTING FIRM FOR 2010
The Companys independent registered public accounting firm
is appointed annually by the Audit Committee. The Audit
Committee examines a number of factors when selecting a firm,
including the qualifications, staffing considerations, and the
independence and quality controls of the firms considered. The
Audit Committee has appointed KPMG LLP as the Companys
independent registered public accounting firm for 2010. KPMG LLP
served as the Companys independent registered public
accounting firm for 2009 and is considered by management to be
well-qualified.
In view of the difficulty and expense involved in changing
auditors on short notice, should the stockholders not ratify the
selection of KPMG LLP as the Companys independent
registered public accounting firm for 2010 under this proposal,
it is contemplated that the appointment of KPMG LLP for the 2010
fiscal year will be permitted to stand unless the Board of
Directors finds other compelling reasons for making a change.
Disapproval by the
10
stockholders will be considered a recommendation that the Board
of Directors select other auditors for the following year.
Representatives of KPMG LLP are expected to be present at the
Annual Meeting and will be given the opportunity to make a
statement, if they desire, and to respond to appropriate
questions.
The Board of Directors recommends a vote FOR the ratification
of the Companys
independent registered public accounting firm for 2010.
OTHER
BUSINESS
The Board of Directors does not know of any matters to be
presented for action at the Annual Meeting other than the
election of directors and the ratification of the Companys
independent registered public accounting firm for 2010. If any
other business should properly come before the Annual Meeting,
the persons named in the accompanying proxy card intend to vote
thereon in accordance with their best judgment.
11
PRINCIPAL
HOLDERS OF COMMON STOCK
The following table sets forth certain information as of
March 12, 2010 regarding persons or groups known to the
Company who are, or may be deemed to be, the beneficial owner of
more than five percent of the Companys Common Stock. This
information is based upon SEC filings by the entities listed
below, and the percentage given is based on
92,603,799 shares outstanding.
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
Percent
|
|
|
Common
|
|
of
|
Name and Address of Beneficial Owner
|
|
Stock
|
|
Class
|
|
FMR LLC
|
|
|
13,319,781
|
|
|
|
14.38
|
%
|
82 Devonshire Street
Boston, Massachusetts 02109
|
|
|
|
|
|
|
|
|
Blackrock, Inc.
|
|
|
8,312,341
|
|
|
|
8.98
|
%
|
40 East
52nd
Street
New York, New York 10022
|
|
|
|
|
|
|
|
|
Bank of America Corporation
|
|
|
5,263,687
|
|
|
|
5.68
|
%
|
100 North Tryon Street
Floor 25, Bank of America Corporate Center
Charlotte, North Carolina 28255
|
|
|
|
|
|
|
|
|
Tradewinds Global Investors, LLC
|
|
|
4,814,180
|
|
|
|
5.20
|
%
|
2049 Century Park East,
20th
Floor
Los Angeles, California 90067
|
|
|
|
|
|
|
|
|
The following table sets forth information regarding beneficial
ownership of the Companys Common Stock by the
Companys directors, the Chief Executive Officer of the
Company, the Chief Financial Officer of the Company, the other
named executive officers and all executive officers and
directors as a group, all as of March 12, 2010. Each such
individual has sole voting and investment power with respect to
the shares set forth in the table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares That
|
|
|
|
|
|
|
May be
|
|
|
|
|
Shares of
|
|
Acquired
|
|
|
|
|
Common
|
|
Within 60
|
|
Percent of
|
Name of Beneficial Owner
|
|
Stock(1)(2)
|
|
Days
|
|
Class
|
|
P. George Benson
|
|
|
4,663
|
|
|
|
|
|
|
|
*
|
|
Herman Cain
|
|
|
4,826
|
|
|
|
|
|
|
|
*
|
|
Wolfgang Deml
|
|
|
10,853
|
|
|
|
|
|
|
|
*
|
|
Francisco R. Gros
|
|
|
4,027
|
|
|
|
|
|
|
|
*
|
|
Gerald B. Johanneson
|
|
|
14,557
|
|
|
|
|
|
|
|
*
|
|
Thomas W. LaSorda
|
|
|
|
|
|
|
|
|
|
|
*
|
|
George E. Minnich
|
|
|
3,992
|
|
|
|
|
|
|
|
*
|
|
Curtis E. Moll
|
|
|
9,439
|
|
|
|
|
|
|
|
*
|
|
Gerald L. Shaheen
|
|
|
4,544
|
|
|
|
|
|
|
|
*
|
|
Hendrikus Visser
|
|
|
8,057
|
|
|
|
|
|
|
|
*
|
|
Andrew H. Beck
|
|
|
61,757
|
|
|
|
29,759
|
|
|
|
*
|
|
Gary L. Collar
|
|
|
36,340
|
|
|
|
27,763
|
|
|
|
*
|
|
Hubertus M. Muehlhaeuser
|
|
|
40,519
|
|
|
|
36,739
|
|
|
|
*
|
|
Martin H. Richenhagen
|
|
|
296,559
|
|
|
|
130,084
|
|
|
|
*
|
|
Hans-Bernd Veltmaat
|
|
|
|
|
|
|
716
|
|
|
|
*
|
|
All executive officers and directors as a group (21 persons)
|
|
|
606,487
|
|
|
|
353,266
|
|
|
|
1.0
|
%
|
12
|
|
|
(1) |
|
This includes grants to Mr. Richenhagen of 31,962
restricted shares that vest on December 6, 2010; 31,962
restricted shares that vest on December 6, 2011; and 63,925
restricted shares that vest on December 6, 2012.
Mr. Richenhagen was issued 127,849 shares, but he will
forfeit them if he does not remain employed at the end of each
respective vesting period. |
|
(2) |
|
Includes the following numbers of restricted shares of the
Companys Common Stock earned under the Companys
Non-Employee Director Stock Incentive Plan, which was terminated
in December 2005, and/or as a result of restricted stock grants
under the Companys current long-term incentive plan by the
following individuals: Mr. Benson 4,463;
Mr. Cain 4,826; Mr. Deml
5,987; Mr. Gros 4,027;
Mr. Johanneson 4,557;
Mr. Minnich 3,992; Mr. Moll
4,939; Mr. Shaheen 4,544;
Mr. Visser 6,862; all directors as a
group 44,197. |
13
EXECUTIVE
COMPENSATION
Executive
Officers
The following table sets forth information as of March 12,
2010, with respect to each person who is an executive officer of
the Company.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions
|
|
Martin H. Richenhagen
|
|
|
57
|
|
|
Chairman of the Board, President and Chief Executive Officer
|
Garry L. Ball
|
|
|
62
|
|
|
Senior Vice President Engineering
|
Andrew H. Beck
|
|
|
46
|
|
|
Senior Vice President Chief Financial Officer
|
David L. Caplan
|
|
|
62
|
|
|
Senior Vice President Materials Management, Worldwide
|
André M. Carioba
|
|
|
59
|
|
|
Senior Vice President and General Manager, South America
|
Gary L. Collar
|
|
|
53
|
|
|
Senior Vice President and General Manager, EAME and
Australia/New Zealand
|
Robert B. Crain
|
|
|
50
|
|
|
Senior Vice President and General Manager, North America
|
Randall G. Hoffman
|
|
|
58
|
|
|
Senior Vice President Global Sales & Marketing
and Product Management
|
Hubertus M. Muehlhaeuser
|
|
|
40
|
|
|
Senior Vice President Strategy & Integration
and General Manager, Eastern Europe & Asia
|
Lucinda B. Smith
|
|
|
43
|
|
|
Senior Vice President Human Resources
|
Hans-Bernd Veltmaat
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55
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Senior Vice President Manufacturing & Quality
|
Martin H. Richenhagen has been Chairman of the Board of
Directors since August 2006 and has served as President and
Chief Executive Officer since July 2004. Mr. Richenhagen is
currently a member of the Board, Audit and
Technology & Environment Committees for PPG
Industries, Inc., a leading coatings and specialty products and
services company. From 2003 to 2004, Mr. Richenhagen was
Executive Vice President of Forbo International SA, a flooring
material business based in Switzerland. From 1998 to 2002,
Mr. Richenhagen was Group President of Claas KGaA mbH, a
global farm equipment manufacturer and distributor. From 1995 to
1998, Mr. Richenhagen was Senior Executive Vice President
for Schindler Deutschland Holdings GmbH, a worldwide
manufacturer and distributor of elevators and escalators.
Garry L. Ball has been Senior Vice President
Engineering since June 2002. Mr. Ball was Senior Vice
President Engineering and Product Development from
2001 to 2002. From 2000 to 2001, Mr. Ball was Vice
President of Engineering at CapacityWeb.com. From 1999 to 2000,
Mr. Ball was Vice President of Construction Equipment New
Product Development at Case New Holland (CNH) Global
N.V. Prior to that, he held several key positions including Vice
President of Engineering Agricultural Tractor for New Holland
N.V., Europe, and Chief Engineer for Tractors at Ford New
Holland.
Andrew H. Beck has been Senior Vice President
Chief Financial Officer since June 2002. Mr. Beck was Vice
President, Chief Accounting Officer from January 2002 to June
2002, Vice President and Controller from 2000 to 2002, Corporate
Controller from 1996 to 2000, Assistant Treasurer from 1995 to
1996 and Controller, International Operations from 1994 to 1995.
David L. Caplan has been Senior Vice
President Material Management, Worldwide since
October 2003. Mr. Caplan was Senior Director of Purchasing
of PACCAR Inc from 2002 to 2003 and was Director of Operation
Support with Kenworth Truck Company from 1997 to 2002.
André M. Carioba has been Senior Vice President and
General Manager, South America since July 2006. Mr. Carioba
held several positions with BMW Group and its subsidiaries
worldwide, including President and Chief Executive Officer of
BMW Brazil Ltda., from 2000 to 2005, Director of Purchasing and
Logistics of BMW Brazil Ltda., from 1998 to 2000, and Senior
Manager for International Purchasing Projects of BMW AG in
Germany, from 1995 to 1998.
14
Gary L. Collar has been Senior Vice President and General
Manager, EAME and Australia/New Zealand since January 2009. From
2004 to December 2008, Mr. Collar was Senior Vice President
and General Manager EAME and EAPAC. Mr. Collar was Vice
President, Worldwide Market Development for the Challenger
Division from 2002 until 2004. Between 1994 and 2002,
Mr. Collar held various senior executive positions with ZF
Friedrichshaven A.G., including Vice President Business
Development, North America, from 2001 until 2002, and President
and Chief Executive Officer of ZF-Unisia Autoparts, Inc., from
1994 until 2001.
Robert B. Crain has been Senior Vice President and
General Manager, North America since January 2006.
Mr. Crain held several positions within CNH Global N.V. and
its predecessors, including Vice President of New Hollands
North America Agricultural Business, from 2004 to 2005, Vice
President of CNH Marketing North America Agricultural business,
from 2003 to 2004 and Vice President and General Manager of
Worldwide Operations for the Crop Harvesting Division of CNH
Global N.V. from 1999 to 2002.
Randall G. Hoffman has been Senior Vice President, Global
Sales & Marketing and Product Management since
November 2005. Mr. Hoffman was the Senior Vice President
and General Manager, Challenger Division Worldwide, from
2004 to 2005, Vice President and General Manager, Worldwide
Challenger Division, from 2002 to 2004, Vice President of Sales
and Marketing, North America, from November 2001 to 2002, Vice
President, Marketing North America, from April 2001 to November
2001, Vice President of Dealer Operations, from June 2000 to
April 2001, Director, Distribution Development, North America,
from April 2000 to June 2000, Manager, Distribution Development,
North America, from 1998 to April 2000, and General Marketing
Manager, from 1995 to 1998.
Hubertus M. Muehlhaeuser has been Senior Vice
President Strategy & Integration and
General Manager, Eastern Europe & Asia since January
2009. From 2005 to 2008, Mr. Muehlhaeuser was Senior Vice
President Strategy & Integration.
Mr. Muehlhaeuser has responsibility for our engines
division. Previously, Mr. Muehlhaeuser spent over ten years
with Arthur D. Little, Ltd., an international
management-consulting firm, where he was made a partner in 1999.
From 2000 to 2005, he led the firms Global Strategy and
Organization Practice as a member of the firms global
management team, and was the firms managing director of
Switzerland from 2001 to 2005.
Lucinda B. Smith has been Senior Vice
President Human Resources since January 2009.
Ms. Smith was Vice President, Global Talent
Management & Rewards from May 2008 to December 2008
and was Director of Organizational Development and Compensation
from 2006 to 2008. From 2005 to 2006, Ms. Smith was Global
Director of Human Resources for AJC International, Inc.
Ms. Smith also held various domestic and international
human resource management positions at Lend Lease Corporation,
Cendian Corporation and Georgia-Pacific Corporation.
Hans-Bernd Veltmaat has been Senior Vice
President Manufacturing & Quality since
July 2008. Mr. Veltmaat was Group Executive Vice President
of Recycling Plants at Alba AG from 2007 to June 2008. From 1996
to 2007, Mr. Veltmaat held various positions with Claas
KGaA mbH in Germany, including Group Executive Vice President, a
member of the Claas Group Executive Board and Chief Executive
Officer of Claas Fertigungstechnik GmbH.
15
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis describes our
compensation philosophies, the compensation programs provided to
our named executive officers (NEOs) and the
decision-making process followed in setting pay levels for our
NEOs during our 2009 fiscal year. This discussion should be read
in conjunction with the tables and related narratives that
follow. Our NEOs for 2009 include:
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Andrew H. Beck, Senior Vice President Chief
Financial Officer
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Gary L. Collar, Senior Vice President and General Manager, EAME
and Australia/New Zealand
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|
Hubertus M. Muehlhaeuser, Senior Vice President
Strategy & Integration and General Manager, Eastern
Europe & Asia
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Martin H. Richenhagen, Chairman of the Board, President and
Chief Executive Officer
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Hans-Bernd Veltmaat, Senior Vice President
Manufacturing & Quality
|
Compensation
Philosophy and Governance
AGCOs compensation philosophy was updated and approved by
the Compensation Committee (the Committee) of the
Board of Directors in July 2009. The philosophy is intended to
articulate the Companys principles and strategy for total
compensation and specific pay program elements. It is closely
aligned with business strategy and reflects performance
attributes and, as such, ties executives interests to
those of stockholders and employees.
It is AGCOs practice to compensate executive officers
through a combination of cash and equity compensation,
retirement programs and other benefits. Our primary objectives
are to provide compensation programs that:
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Align with stockholder interests;
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Reward performance;
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Attract and retain quality management;
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Encourage executive stock ownership;
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Are competitive with companies of similar revenue size, industry
and complexity;
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Mitigate excessive risk taking; and
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Are consistent among our locations worldwide
|
We believe that as an executives responsibilities
increase, so should the portion of his or her total pay
comprised of annual incentive cash bonuses and long-term
incentive compensation.
A significant portion of our executive compensation opportunity
is related to factors that directly and indirectly influence
stockholder value, including stock performance, earnings per
share, operational performance, free cash flow performance and
return on capital. Another significant factor in the
Committees decisions to make equity-based awards to our
executives is stockholder dilution, and the Committee strives to
minimize the dilutive effect of those awards on stockholders.
Executive pay at AGCO is intended to be market competitive, but
also performance-based, and structured so that it addresses
retention, recruitment, market scarcity and other business
concerns. Awards under compensation programs are set to
generally approximate the median level of market competitiveness
as compared to other companies of similar revenue size, industry
and complexity. We also consider geographic market differences
when setting the value and mix of the Companys
compensation for foreign executives. Payouts earned under
incentive awards are designed to vary with the Companys
performance, with increased payouts awarded for above-target
performance and lower or no payouts awarded for below-target
performance.
When establishing the compensation and performance criteria, we
set goals that we believe reflect key areas of performance that
support our long-term success. We consider factors such as the
Companys current performance
16
compared to industry peers, desired levels of performance
improvement, and industry trends and conditions when determining
performance expectations within the Companys compensation
plans.
The Board of Directors periodically meets independently with the
Committee chairman, who participates in executive sessions with
the Board (without AGCO management present) to discuss
compensation matters.
The Committee approves all compensation for executive officers,
including the structure and design of the compensation programs.
The Committee is responsible for retaining and terminating
compensation consultants and determining the terms and
conditions of their engagement, including fees. Since 2005, the
Committee has engaged Towers Watson (formerly Watson Wyatt
Worldwide), an internationally recognized human resources
consulting firm, to advise the Committee, and at times
management, with respect to the Companys compensation
programs and to perform various related studies and projects,
including market analysis and compensation program design. A
Towers Watson representative reports directly to the Committee
as its compensation advisor.
The Committee annually reviews the role of its compensation
advisor and believes that he is fully independent for purposes
of providing on-going recommendations regarding executive
compensation. In addition, the Committee believes that the
compensation advisor provides candid, direct and objective
advice to the Committee that is not influenced by any other
services provided by Towers Watson. To ensure independence:
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The Committee directly hired and has the authority to terminate
the compensation advisor;
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The compensation advisor reports directly to the Committee and
the chairperson;
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The compensation advisor meets regularly and as needed with the
Committee in executive sessions that are not attended by any of
the Companys officers;
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The compensation advisor and his team at Towers Watson have
direct access to all members of the Committee during and between
meetings;
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The compensation advisor is not the Towers Watson client
relationship manager for AGCO;
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Neither the compensation advisor nor any member of his team
participates in any activities related to the administrative
services provided to AGCO by other Towers Watson business
units; and
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Interactions between the compensation advisor and AGCOs
management generally are limited to discussions on behalf of the
Committee and information presented to the Committee for
approval.
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Annual
Review of Consultant Independence
Towers Watson provides the Committee an annual update on its
services and related fees. The Committee determines whether
Towers Watsons services are performed objectively and free
from the influence of management. With the full knowledge of the
Committee, AGCO has retained a distinct unit of Towers Watson
for all other global services, including broad-based employee
retirement and benefit services, and specific projects within
multiple countries for various Company subsidiaries, excluding
Committee services.
The Committee also closely examines the safeguards and steps
Towers Watson takes to ensure that its executive compensation
consulting services are objective, for example:
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Towers Watson has separated its executive compensation
consulting services into a single, segregated business unit
within Towers Watson;
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Towers Watson pays its executive compensation consultants solely
on their individual results and the results of its executive
compensation consulting practice. The Committees
compensation advisor receives no incentives based on other
services Towers Watson provides to AGCO;
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The total amount of fees for consulting services provided to the
Committee in 2009 by its compensation advisor was approximately
$318,000; and
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The total amount of fees paid by AGCO to Towers Watson in 2009
for all other services, excluding Committee services, was
approximately $1,353,000. These other services primarily related
to actuarial services in respect of the Companys defined
benefit plans, general employee compensation consulting
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17
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services, benefit plan design services and pension
administration services. Approximately $482,000 of the
$1,353,000 in other services were paid directly from the pension
trusts of the Companys U.S. and U.K. pension plans.
|
The Committee also closely examines and monitors the safeguards
and steps that its compensation advisor takes to ensure that
Towers Watsons executive compensation consulting services
are objective and do not represent any conflict of interest,
which includes the following protocol:
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When the compensation advisor provides advice to the Committee,
he reports directly to the Committee chair, who has the
authority to seek a second opinion or terminate the
advisors work at any time;
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When retained by the Committee, the compensation advisor does
not serve as the firms account director for the client,
nor is he involved in account planning regarding any services
other than executive compensation consulting;
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All Towers Watson consultants adhere to a stringent code of
conduct articulating their commitment to impartial
advice; and
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Towers Watson fees are in no way linked to the size of any
executives compensation package.
|
For these reasons, the Committee does not believe that Towers
Watsons services for AGCOs employee retirement and
benefit plans, or its specific projects, compromise its
compensation advisors ability to provide the Committee
with perspective and advice that is independent and objective.
Competitive
Analyses and Benchmarking
We perform competitive analyses with respect to cash
compensation, long-term equity incentives and executive
retirement programs. These analyses are conducted regularly and,
in 2009, included a comparison to nationally recognized
compensation surveys, as well as a comparison to a peer group of
other industrial companies. These competitive analyses provide
us with information regarding ranges and median compensation
levels, as well as the types of compensation arrangements in use
at other companies. The analyses are used to review, monitor and
establish appropriate and competitive compensation programs,
determine the appropriate mix of compensation between programs
and establish the specific compensation levels for our
executives.
In 2009, the Committee performed an external market review that
examined the competitiveness of the Companys NEOs
total compensation. The analysis reviewed the dollar value of
the compensation, as well as the mix of compensation between
base salary, annual cash incentive bonus and long-term incentive
(LTI) pay. The Committees goal is to establish
base salary, target total cash (base salary plus target bonus
opportunity) and target total direct compensation (target total
cash plus target LTI opportunity) for each NEO within plus/minus
20% of the market median, which reflects an average of published
survey data and peer proxy statements. The competitive market
comparison for each of the Companys NEOs is summarized
below:
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Target Total Direct
|
Name
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|
Base Salary
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Target Total Cash
|
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Compensation
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Mr. Beck
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Slightly Below
Market Median
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Near Market Median
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Slightly Below Market Median
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Mr. Collar
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Slightly Below
Market Median
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Slightly Below
Market Median
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|
Slightly Below Market Median
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Mr. Muehlhaeuser
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Slightly Above
Market Median
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Slightly Above
Market Median
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Near Market Median
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Mr. Richenhagen
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Near Market Median
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Near Market Median
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Near Market Median
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Mr. Veltmaat
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Slightly Above
Market Median
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Slightly Above
Market Median
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Slightly Above Market Median
|
The Committee uses the external market review to help it make
informed decisions regarding NEO compensation. For the Chief
Executive Officer, the Committee recognizes the critical nature
of this role, his higher level of responsibility within the
Company and his more pervasive influence over the Companys
performance and,
18
therefore, provides market competitive levels of compensation;
as a result, compensation for this position differs from levels
of compensation paid to other NEOs. Mr. Richenhagen, as
Chief Executive Officer of the Company, is placed in his own
level based purely on median market information.
The Companys Senior Vice Presidents (SVPs) are
grouped into two tiers. All of the General Managers and the
Chief Financial Officer are grouped together in the first tier,
and the Companys functional SVPs are grouped together in
the second tier. It is the Companys philosophy to
compensate SVPs in each tier reasonably similarly, including
each of the General Managers and the Chief Financial Officer,
even though market data might suggest otherwise. The market data
for each of the General Managers is adjusted to reflect the
different sizes of the businesses they manage, with
Mr. Collar managing the largest business and
Mr. Muehlhaeuser the smallest. The Committee, in
recognition of the collaborative efforts of the General Managers
operating not only their respective businesses, but also the
Companys worldwide business, sets the compensation of all
General Managers at similar levels.
In Mr. Becks case, the Committees view is that
the Chief Financial Officer should not be paid significantly
more than the General Managers, which is consistent with the
Companys compensation philosophy and reinforced by the
internal grouping of the Companys executives. For
Mr. Veltmaat, the top manufacturing executive, the
Committee recognizes the importance of his role internally
because of its contribution to the business, and, thus, sets pay
for his position accordingly.
As part of its regular review of the composition of the peer
group, the Committee modified the Companys peer group in
July 2009 to include the following 20 companies: The
Black & Decker Corporation, Cooper Industries, Inc.,
Cummins Inc., Danaher Corporation, Dover Corporation, Eaton
Corporation, Flowserve Corporation (added in 2009), Illinois
Tool Works, Inc. (added in 2009), Ingersoll-Rand Company Limited
(added in 2009), The Manitowoc Company Inc., Navistar
International Corporation, Oshkosh Truck Corporation, PACCAR
Inc, Parker-Hannifin Corporation, Rockwell Automation, Inc.
(added in 2009), SPX Corporation, The Stanley Works, Terex
Corporation, Textron, Inc. (added in 2009), and The Timken
Company. The new peer group reflects the deletion of BorgWarner,
Inc., Lennox International Inc., Precision Castparts
Corporation, and TRW Automotive. The Committee believes that the
companies in the new peer group better reflect AGCOs size
and more closely align with our business and the markets in
which we serve and operate. This peer group was used as part of
the Committees external market review, and the Committee
will continue to review the composition of the peer group and
make updates as needed.
Components
of AGCO Total Compensation
AGCOs compensation philosophy defines total compensation
to consist of:
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Base Salary
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Annual Cash Incentive Bonuses
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Long-term Incentives
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Benefits and Certain Perquisites
|
For a NEO, the variable or incentive pay (both annual and LTI)
opportunity represents a large portion of the mix, or at least
60% of total expected compensation. Benefits represent a much
smaller portion of the mix for each NEO when compared to base
salary and incentive pay. The components of compensation are
described below.
Base
Salary
Base salary establishes the foundation of total compensation and
supports the attraction and retention of qualified staff. The
base salary for executives is reviewed and approved by the
Committee annually for executive officers. In addition, base
salaries may be changed as a result of a new appointment or a
change in responsibility for an executive. Base salaries are
designed to provide competitive levels of compensation to
executives based on their scope of responsibilities, experience,
and performance. Base salaries also serve as the basis for our
determining annual and long-term target incentive opportunities.
19
In light of the economic recession that adversely affected the
Companys operating results in 2008, the Committee
considers base salary merit increases in April of each year and
determined that base salaries for NEOs should not be increased
for 2009. Performance-based increases will be recommended for
2010.
Annual
Cash Incentive Bonuses
The Companys Incentive Plan (the IC Plan) is
intended to facilitate alignment of management with corporate
objectives and stockholder interests in order to achieve
outstanding performance and to meet specific AGCO financial
goals. We believe that the annual incentive should be a
substantial component of total compensation. Further, incentive
compensation must be based on AGCOs performance, as well
as the contribution of executive officers through the leadership
of their respective regional or functional areas.
Incentive compensation opportunities are expressed as a
percentage of the executive officers gross base salary.
The annual award opportunity for Mr. Richenhagen and the
other NEOs in 2009 are shown in the chart below:
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Opportunity as a percentage
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of base salary
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Portion attributable to
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Minimum
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Target
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Maximum
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Corporate
|
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Regional/Functional
|
Name
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Award
|
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Award
|
|
Award
|
|
Goals
|
|
Goals
|
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Mr. Beck
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40
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%
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100%
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|
150
|
%
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|
100
|
%
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0
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%
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Mr. Collar
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28
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%
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70%
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105
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%
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50
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%
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50
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%
|
Mr. Muehlhaeuser
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28
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%
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70%
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|
105
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%
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|
50
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%
|
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|
50
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%
|
Mr. Richenhagen
|
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|
52
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%
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|
130%
|
|
|
|
195
|
%
|
|
|
100
|
%
|
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0
|
%
|
Mr. Veltmaat
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20
|
%
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|
50%
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|
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|
75
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%
|
|
|
70
|
%
|
|
|
30
|
%
|
The annual incentive compensation is designed to be deductible
under Section 162(m) of the IRC.
Under the 2008 IC Plan, graduated award payments of 40% of
target are made if a minimum of 80% of the target goal is met,
increasing to the maximum payout of 150% of target when 120% of
the target goal is met. The corporate objectives are set at the
beginning of each year and approved by the Committee. However,
unless a threshold of 60% of the adjusted earnings per share
(EPS) target goal is reached, no awards are paid
regardless of performance relative to the other target goals.
For the year ended December 31, 2009, the corporate
objectives were based on targets for free cash flow
(FCF), EPS, operating margin and customer
satisfaction (CS). The calculation of these measures
and corporate weightings are as follows:
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FCF: Cash flow from operating activities less
capital expenditures. This measure excludes cash flow from
financing, such as increases in accounts receivables
securitizations (40% weight). FCF equals cash flow from
operating activities minus capital expenditures.
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|
EPS: Diluted and adjusted to exclude
restructuring expenses and other infrequent items (30% weight).
EPS equals adjusted net income (excluding restructuring expenses
and other infrequent items) divided by diluted weighted average
number of common and common equivalent shares outstanding.
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Operating margin: The percentage calculated
when income from operations is divided by net sales (20%
weight). Operating margin equals income from operations divided
by net sales.
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CS: Overall customer service index, which
measures after-sales service, sales experience and product
quality (10% weight).
|
An executives annual cash incentive is determined based on
performance compared to pre-established corporate,
regional/functional and personal performance goals. For
executive officers with a regional focus, their goals are
established primarily for operational performance in their
geographic area or other quantitative objectives based on their
specific responsibilities. For the positions of Chief Financial
Officer and Chief Executive Officer (Messrs. Beck and
Richenhagen, respectively), 100% of their incentive is based on
corporate measures and results.
In addition to corporate goals, the plan engages participants to
focus on regional and functional goals to provide incentives for
behaviors linked to business drivers, such as growth in market
share. For participants with direct regional responsibility, the
corporate portion is a minimum of 50% of the total target award.
For these
20
participants, regional goals are also 50%, except for our Chief
Executive Officer and Chief Financial Officer, who are solely
measured on corporate goals. For participants with direct
functional responsibility, the corporate portion is a minimum of
70% of the total target award. For these participants,
functional goals are 30%. Goal setting is based on internal
planning informed by external factors. The regional and
functional goals help provide alignment with corporate goals and
the Companys overall performance. Although goals differ by
region and function, examples of regional and functional goals
for 2009 are as follows:
|
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|
Regional Goals
|
|
Functional Goals
|
|
Income Contributed (operating income less
capital charge for working capital employed)
|
|
Total Cost Variances vs. Budget
Average Inventory
|
Average Inventory and Accounts Receivable as a Percentage of Net Sales
Market Share Improvement
New Product Introduction Metric
|
|
Right First Time (Quality)
Direct Labor Productivity
AGCO Improvement Methods Implementation
|
For 2009, targets for each of the measures and AGCOs
actual performance are summarized below:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
Actual
|
|
Percent
|
|
Earned
|
|
|
Measure
|
|
Weight
|
|
Objective
|
|
Performance
|
|
Achieved
|
|
Award
|
|
|
|
60% of EPS Target (minimum threshold)
|
|
|
N/A
|
|
|
$
|
1.92
|
|
|
$
|
1.55
|
|
|
|
Not Achieved
|
|
|
0%
|
|
|
Free Cash
Flow(1)
|
|
|
40%
|
|
|
$
|
150
|
|
|
$
|
95
|
|
|
|
63%
|
|
|
0%
|
|
|
Earnings Per Share
|
|
|
30%
|
|
|
$
|
3.20
|
|
|
$
|
1.55
|
|
|
|
48%
|
|
|
0%
|
|
|
Operating Margins
|
|
|
20%
|
|
|
|
6.1
|
%
|
|
|
3.5
|
%
|
|
|
57%
|
|
|
0%
|
|
|
Customer Satisfaction Index
|
|
|
10%
|
|
|
|
85.5
|
%
|
|
|
85.0
|
%
|
|
|
99%
|
|
|
0%
|
|
|
|
|
|
(1) |
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Amounts stated in millions of dollars. |
For 2009, the Committee determined that the Company did not
achieve the minimum performance level for EPS to warrant an
incentive payout. As a result, no bonuses were paid to NEOs or
other participants.
The Company considers the target goals under the IC Plan for the
current year to be confidential. Historically, the Committee has
established target goals for the Companys executive
officers that the Committee believed at the time were reasonably
achievable. If the Company is able to meet the objectives set
out in its budget for 2010, and if each executive officer
achieves what the Committee considers reasonable regional and
functional goals, then the executive officers should be able to
earn their target bonuses for achieving those goals. However,
given the recent volatility in the markets and the general
downturn in economic conditions, the Committee is not able to
predict this result with any certainty.
The Committee believes that the annual incentive plan motivates
our NEOs to drive financial results and make sound business
decisions. Also, special incentive awards can be made based on
extraordinary and unusual achievement as determined by the
Committee. Such awards are subject to approval of the Board of
Directors. No such awards were made by the Committee in 2009.
The IC Plan also provides for payment of a pro rata portion of
the participants bonus upon a change of control, as well
as additional bonus payments to certain participants terminated
without cause within two years of a change of control. This is
further explained in Severance Benefits and Change of
Control.
Long-term
Incentives
The 2006 LTI Plan provides performance- and retention-based
equity opportunities to the Companys NEOs. LTI represents
a significant component of total compensation and weighs heavily
in the overall pay mix for executives. The overarching
principles of the 2006 LTI Plan are:
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LTI is performance-based and is intended to engage executives in
achieving longer-term goals and to make decisions in the best
interests of stockholders;
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21
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Target award opportunities are generally competitive with median
levels of other companies of similar size, industry and
complexity;
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Realizable gains are intended to vary with Company performance
and stock price growth; and
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Performance goals are aligned with stockholder interests and
support the long-term success of AGCO.
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The current LTI opportunity under the 2006 LTI Plan for
executives is comprised of two vehicles: a performance share
plan (PSP), which is projected to comprise
approximately 75% of an executives target LTI award, and a
grant of stock-settled stock appreciation rights
(SSARs), which is projected to comprise
approximately 25% of the executives LTI target award
opportunity.
The PSP and the SSARs are summarized below:
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PSP Award opportunities are denominated in shares of
our Common Stock and are earned on the basis of our performance
versus pre-established goals for a three-year cycle.
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SSARs Similar to a stock option, SSARs are awards
that provide the participant with the right to receive share
appreciation over the grant price, payable in whole shares of
our Common Stock, at any time after the grant is vested and
within the specified term of the grant. The SSARs vest at a rate
of 25% a year for four years, with a term of seven years.
|
For grants under the PSP, earned awards are based on achievement
compared to two measures: cumulative EPS and average return on
invested capital (ROIC) over a three-year
performance period. These measures were chosen because we
believe that they are meaningful measures of our performance and
have a strong correlation to generating stockholder value over
the long-term. We established three levels of performance for
each measure: threshold, representing the minimum level
of performance that warrants a payout; target,
representing a level of performance where median target
compensation levels are appropriate; and outstanding,
representing a maximum realistic performance level where
increased compensation levels are appropriate. The cumulative
earnings per share and ROIC goals are linked within a
performance award matrix which is used to determine the number
of shares earned in various combinations of performance. The
award opportunity levels are expressed as multiples of the
executives target award opportunity.
The matrix of award opportunities is illustrated below:
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Cumulative Earnings
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Below
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Threshold
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Threshold
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Target
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Outstanding
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|
Outstanding
|
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|
100.0%
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|
|
|
116.5%
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|
|
|
150.0%
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|
|
|
200.0%
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|
Average
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Target
|
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|
50.0%
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|
66.6%
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|
100.0%
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|
150.0%
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ROIC
|
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Threshold
|
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|
16.5%
|
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|
33.3%
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|
66.6%
|
|
|
|
116.5%
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Below Threshold
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0.0%
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|
16.5%
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50.0%
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|
100.0%
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As evident in the matrix above, the performance targets of
cumulative earnings per share and average ROIC are given equal
weighting in the determination of the number of shares earned.
In addition, the matrix provides for an award of 33%, 100% or
200% of the target shares upon achieving the threshold, target
or outstanding performance level for each goal, respectively. If
the actual performance of the goal falls in between the
established goals for threshold, target and outstanding
performance, the associated payout factor will be calculated
using a straight-line interpolation between the two goals. The
Committee has the discretion to exclude restructuring and
certain other infrequent items from the calculation of
cumulative earnings per share or average ROIC in order to ensure
the 2006 LTI Plan is equitable and executive decisions and
actions are not inhibited by their projected impact on the Plan.
Our objective in sizing and setting the award opportunities for
executives is to approximate the median level of market
competitiveness within the Companys peer group at the
target level of performance. PSP awards are
structured at the threshold level of performance to
approximate the markets 25th percentile and at the
outstanding level of performance to approximate the
75th percentile. For the SSAR awards, the number of shares
granted is based on the expected value at the median level of
market competitiveness.
22
For the awards granted in 2007 under the PSP, the Committee
determined that, based on the Companys performance for the
three-year PSP performance cycle
(2007-2009),
the Company achieved the outstanding award level, or
200% of payout as shown in the chart below. While the global
economic downturn presented challenges in 2009, robust years in
2007 and 2008 produced favorable financial results that helped
the Company achieve the outstanding award level for
the three-year period. The Companys cumulative EPS and
average ROIC over the three-year performance cycle
(2007-2009)
were 88% and 70%, respectively, better than the results achieved
during the preceding three-year period
(2004-2006).
The three-year period also included the year 2008, when record
net sales and profits were achieved and was also a time-frame
when the Company made further significant investments in product
development and productivity improvements to support its
long-term strategies.
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Earned
|
Measure
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Threshold
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Target
|
|
Outstanding
|
|
Actual
|
|
Award
|
|
Cumulative EPS
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|
$
|
3.64
|
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|
$
|
4.30
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|
$
|
5.80
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|
|
$
|
8.16
|
|
|
|
200
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%
|
Average ROIC
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|
|
6.1
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%
|
|
|
7.2
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%
|
|
|
9.6
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%
|
|
|
11.7
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%
|
|
|
200
|
%
|
For EPS, the target goal was $4.30 per share and the Company
actually achieved 190% of the goal, and for average ROIC, the
target goal was 7.2% and the Company actually achieved 163% of
the goal, which, in each case, qualified as an
outstanding result and, thus, the 200% payout.
The target award and actual number of shares received by the
NEOs for the three-year performance cycle covering
2007-2009
are shown below:
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Three-Year Performance Cycle (2007-2009)
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Target
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|
Actual
|
Name
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|
Award
|
|
Award
|
|
Mr. Beck
|
|
|
21,500 shares
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|
|
|
43,000 shares
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|
Mr. Collar
|
|
|
21,500 shares
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|
|
|
43,000 shares
|
|
Mr. Muehlhaeuser
|
|
|
17,500 shares
|
|
|
|
35,000 shares
|
|
Mr. Richenhagen
|
|
|
95,000 shares
|
|
|
|
190,000 shares
|
|
Mr.
Veltmaat(1)
|
|
|
0 shares
|
|
|
|
0 shares
|
|
|
|
|
(1) |
|
Mr. Veltmaat was not with the Company in 2007 and, thus,
did not receive an award. |
In 2009, the Committee established award opportunities for
executives covering a new three-year PSP performance cycle
(2009-2011),
as well as a new grant of SSARs. The Committees strategy
is to regularly evaluate the size of award levels by taking into
consideration market trends, the industrys cyclicality and
other volatility factors. New targets covering the 2009
three-year PSP performance period also were established for
cumulative EPS and average ROIC.
The Company considers the target goals for PSP awards for
uncompleted cycles to be confidential. Historically, the
Committee has established target goals for the Companys
executive officers that the Committee believed at the time were
reasonably achievable. If the Company is able to meet the
objectives set out in its strategic plans for the
2009-2011
period, then each executive officer should be able to earn a
target level award for achieving those goals in each of the
Companys open performance share cycles
(2008-2010
and
2009-2011).
However, given the recent volatility in the markets and the
general downturn in economic conditions, the Committee is not
able to predict this result with any certainty.
The Committee approves all grants of stock-based compensation to
the Chief Executive Officer and all other executive officers.
The Chief Executive Officer, with the assistance of the Senior
Vice President Human Resources, assists the
Committee with recommendations for award levels for all other
executive officers. Our policy is that SSARs are awarded with
exercise prices at or above the fair market value of the
Companys Common Stock on the date of the grant.
Clawback
of Incentive Compensation
In the event the Board of Directors determines that an executive
officers misconduct has contributed to the Company having
to restate its financial statements, the Board may take remedial
action against the officer. To the
23
extent permitted by applicable law, the remedial action may
include requiring the return of any bonus or incentive
compensation awarded to the officer or the cancellation of
unvested restricted or deferred stock awards previously granted
to the officer if the amount of such bonus or incentive
compensation was greater than it would have been had the
accounting been correct.
Share
Ownership and Retention Guidelines
We believe that share ownership by directors and executives
emphasizes the alignment of their interests with that of
stockholders. The stock ownership guidelines for the
Companys non-executive directors and executive officers
call for non-employee directors to own Common Stock, or other
equity equivalents, equal in value to four times the value of
the annual retainer. The Chief Executive Officer is required to
own Common Stock, or other equity equivalents, equal in value to
five times annual salary, and all other executive officers are
required to own Common Stock, or other equity equivalents, equal
in value to three times respective annual salaries. Once the
minimum ownership level is acquired, an individual will remain
qualified if he or she continues to hold at least the same
number of shares regardless of the change in market value of the
underlying stock. Directors and executive officers as of
October 23, 2008 have a period of four years from that date
to accumulate enough shares to satisfy the stock ownership
requirements. Any person becoming a director or executive
officer after October 23, 2008 is allowed a four-year
period from his or her date of election or appointment to comply
with the stock ownership requirements.
Risk
Mitigation
The overall design of the executive compensation program
attempts to mitigate the possibility that excessive risks are
being taken that could harm the long-term value of AGCO. These
features include: (1) the annual review and approval of the
financial performance objectives by the Compensation Committee;
(2) the use of multiple performance objectives, thus
mitigating too heavy a focus on any one in particular;
(3) the capping of short and long-term incentive payouts
for NEOs and other participants at 150% and 200% of the target
opportunity, respectively; (4) stock ownership requirements
for senior executives, which we believe align their long-term
interests with that of shareholders; and (5) a recoupment
program that can require the return of any bonus or incentive
compensation that was improperly earned.
Retirement
Benefits
We believe that offering competitive retirement benefits is
important to attract and retain top executives. Our
U.S.-based
executives participate in a non-qualified executive defined
benefit plan in addition to a traditional defined contribution
401(k) plan. For the Companys 401(k) plan, AGCO generally
contributed approximately $11,025 to each executives
401(k) account during 2009, which was the maximum match
contribution allowable under our plan.
In January 2007, we established the Companys executive
nonqualified Pension Plan (2007 ENPP), which we
believe is competitive with companies of similar type and size.
The 2007 ENPP provides
U.S.-based
executive officers with retirement income for a period of
15 years based on a percentage of their average final
salary and bonus, reduced by the executive officers social
security benefits and 401(k) employer-matching contributions.
The benefit paid to the executive officers is 3% of the average
of the last three years of their respective base salaries plus
bonus prior to their termination of employment (final
earnings) multiplied by credited years of service, with a
maximum annual benefit of 60% of final earnings. To provide a
stronger retention feature, benefits under the 2007 ENPP vest if
the participant has attained age 50 with at least ten years
of service (five years of which must include tenure as an
executive officer), but are not payable until the participant
reaches age 65 or upon termination of services because of
death or disability, adjusted to reflect payment prior to
age 65. The Companys
non-U.S.-based
executive officers participate in local country retirement
benefit plans that we believe are competitive for executive
officers in the local employment market. Additional details
regarding retirement benefits are provided in the 2009
Summary Compensation Table and the 2009 Pension
Benefits Table.
24
Severance
Benefits and Change of Control
We believe that reasonable severance benefits are necessary to
attract top executives. The levels of severance benefits
provided to our executives are designed to take into account the
difficulty executives may have to find comparable employment.
The employment agreements with our executives provide severance
benefits when the termination is without cause or
the employee terminates for good reason. The
severance benefit depends on whether the termination involved a
change of control. For terminations without cause or
for good reason that do not involve a change of
control, the severance benefit allows for the executives to
receive their base salary for a period of up to two years and a
pro rata portion of the bonus to which the executive would have
been entitled for the year of termination had the executive
remained employed for the entire year. Specifically for the NEOs
for 2009, Messrs. Collar, Muehlhaeuser and Veltmaat may
receive their respective base salaries and bonus amounts for one
year upon termination and Messrs. Beck and Richenhagen may
receive their respective base salaries and bonus amounts for two
years upon termination. The severance benefit would be reduced
or terminated at the time the executive found new employment.
The Company also continues health and life insurance benefits
during the time the severance benefits are paid for
U.S.-based
executives. A terminated
U.S.-based
executive also is entitled to receive any vested benefits under
the 2007 ENPP payable beginning at age 65.
In addition to the above, upon termination, the Company is
obligated to reimburse Mr. Collar for expenses to relocate
to the United States.
In January 2010, the Committee approved changes to the severance
benefit for Mr. Richenhagen for termination without
cause or for good reason that does not
involve a change of control. For a termination without
cause or for good reason,
Mr. Richenhagen will be eligible for a severance benefit
that allows him to receive his base salary for two years upon
termination and a bonus equal to two times the average of the
prior two completed fiscal years and the current fiscal
years trend. Consistent with the severance benefits
provided to other NEOs, Mr. Richenhagens severance
benefit would be reduced or terminated at the time he found new
employment. The Company also will continue health and life
insurance benefits during the time these severance benefits are
paid, and Mr. Richenhagen is entitled to receive any vested
benefits under the 2007 ENPP payable beginning at age 65.
We also believe it is important to provide certain additional
benefits upon a change of control in order to protect the
executives retirement benefits and potential income that
would be earned associated with our equity incentive plans. In
addition, it is our belief that the interests of stockholders
will be best served if the interests of the Companys
senior management are aligned with them. By providing certain
change of control benefits, we believe the Companys
executives will not be reluctant to consider potential change of
control transactions that may be in the best interests of
stockholders.
The Board of Directors has approved post-employment compensation
to NEOs for terminations that occur within two years of a change
of control. In such case, the executive would receive a lump-sum
payment equal to (i) two times his or her base salary in
effect at the time of termination, (ii) a pro-rata portion
of his or her bonus or other incentive compensation earned for
the year of termination and (iii) a bonus equal to two
times the three year average of his or her awards received
during the prior two completed fiscal years and the current
fiscal years trend (except that for Mr. Richenhagen,
the lump sum payment would equal (i) three times his base
salary in effect at the time of termination, (ii) a
pro-rata portion of his bonus earned for the year of termination
and (iii) a bonus equal to three times the three year
average of Mr. Richenhagens awards received during
the prior two completed fiscal years and the current fiscal
years trend), and the executive would also be entitled to
receive specific retirement benefits and the acceleration of
vesting of outstanding equity awards. Upon a change of control,
the Companys PSP equity incentive plan allows for all
unearned awards to executives to be earned at the greater of the
target performance level or at the level of performance dictated
by the trend of our performance to date. In addition, all
outstanding SSARs vest immediately. All benefits under the 2007
ENPP that have been earned based on years of service also become
vested. Any executives terminated upon a change of control would
also be entitled to the severance benefits described above and
receive a full
gross-up for
taxes due on any payments.
For purposes of these benefits, a change of control
occurs, in general, when either (i) one or more persons
acquire Common Stock of the Company that, together with other
stock owned by the acquirers, amounts to more
25
than 50% of the total fair market value or total voting power of
the stock, (ii) one or more persons acquire during a
12-month
period stock of the Company that amounts to 30% or more of the
total voting power of the stock, (iii) a majority of the
members of the Board of Directors of the Company are replaced in
any 12-month
period by directors who are not endorsed by a majority of the
directors then in office, or (iv) with some exceptions, one
or more persons acquire assets from the Company that have a
total fair market value equal to or greater than 40% of the
aggregate fair market value of all of the Companys assets.
Perquisites
and Other Benefits
We believe that cash and incentive compensation should be the
primary focus of compensation and that perquisites should be
modest. We periodically review perquisites for our executives to
ensure conformity with this policy. The primary perquisites
available to executives are the use of an automobile leased by
the Company and the reimbursement of dues associated with a
social or country club. The Company does not allow executive
officers the use of the Company leased aircraft for personal
use. The Company also provides supplemental life and disability
insurance for its executives. The life insurance generally
provides for a death benefit of six times the executive
officers base salary.
For executives on foreign assignments, the Company provides
additional expatriate benefits that are designed to compensate
the employee for differences in costs of living and taxation
between the executives home country and foreign country.
In addition, the Company generally provides additional financial
assistance to the expatriate for expenses such as relocation,
childrens education, tax preparation and home leave travel.
Executives also participate in the Companys other benefit
plans on the same terms as other employees. These plans include
medical, dental, and life and disability insurance coverage.
Post-Employment
Compensation
Each of the NEOs is covered by an employment agreement with the
Company. These agreements provide post-employment compensation
and benefits in the event of certain types of termination of
employment, including death, disability, involuntary termination
without cause, or termination for good reason by the executive.
For further detail on the post-employment compensation and
benefits each NEO is entitled to in the event of certain types
of termination, please refer to the tables below under the
caption Other Potential Post-Employment Payments.
Summary
Overall, we believe the Companys executive compensation
programs accomplish the objectives for which they have been
designed and are in concert with the Companys compensation
philosophy. We feel the competitive compensation that is
provided to the Companys executives is reasonable and has
enabled us to attract and retain a strong management team. We
further believe that the Companys short-term and long-term
incentive programs appropriately reward AGCOs executives
for their achievement of performance goals and that these
programs sufficiently align the interests of the executives with
those of the stockholders. The overall design of the executive
compensation program also attempts to minimize risk-taking
incentives primarily because: (1) the financial performance
objectives of the short and long-term incentive plans are
reviewed and approved annually by the Board of Directors,
(2) the plans consist of multiple performance objectives,
thus mitigating too heavy a focus on any one in particular,
(3) short and long-term incentive payouts for NEOs are
capped at 150% and 200% of the target opportunity, respectively,
and (4) the Company has in place a clawback provision that
can require the return of any bonus or incentive compensation.
Summary
of Cash and Certain Other Compensation and Other Payments to the
Named Executive Officers
Overview. The following sections provide a
summary of cash and certain other amounts the Company paid for
the year ended December 31, 2009 to the NEOs. Except where
noted, the information in the 2009 Summary Compensation
Table generally pertains to compensation to the NEOs for
the years ended December 31, 2007, 2008
26
and 2009. The compensation disclosed below is presented in
accordance with SEC regulations. According to those regulations
we are required in some cases to include:
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amounts paid in previous years;
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|
amounts that may be paid in future years, including amounts that
will be paid only upon the occurrence of certain events, such as
a change of control of the Company;
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amounts paid to the NEOs which might not be considered
compensation (for example, distributions of deferred
compensation earned in prior years, and at-market earnings,
dividends or interest on such amounts);
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an assumed value for share-based compensation equal to the fair
value of the grant as presumed under accounting regulations,
even though such value presumes the option or similar instrument
will not be forfeited or exercised before the end of its life,
and even though the actual realization of cash from the award
depends on whether performance conditions are met, whether the
executive will continue his or her employment with the Company,
and when the executive chooses to exercise the option or similar
instrument; and
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the increase in present value of future pension payments, even
though such increase is not cash compensation paid in the
current year and even though the actual pension benefits will
depend upon a numbers of factors, including when the executive
retires, his or her compensation at retirement, and in some
cases the number of years the executive lives following his or
her retirement.
|
Therefore, we encourage you to read the following tables
closely. The narratives preceding the tables and the footnotes
accompanying each table are important parts of each table. Also,
we encourage you to read this section in conjunction with the
Compensation Discussion and Analysis set forth above.
SUMMARY
OF 2009 COMPENSATION
The following table provides information concerning the
compensation of the NEOs for the Companys three most
recently completed fiscal years ended December 31, 2007,
2008 and 2009.
In the column Salary, we disclose the amount of base
salary paid to the NEO during the fiscal year. In the columns
Stock Awards and SSAR Awards, we
disclose the award of stock or SSARs measured in dollars and
calculated in accordance with FASB ASC Topic 718. For SSARs, the
FASB ASC Topic 718 aggregate grant date fair value per share is
based on certain assumptions that the Company explains in
Note 10 to our Consolidated Financial Statements, which are
included in the Companys annual report on
Form 10-K.
For awards of stock, the FASB ASC Topic 718 aggregate grant date
fair value per share is equal to the closing price of the
Companys Common Stock on the date of grant. Please also
refer to the table below under the caption 2009 Grants of
Plan-Based Awards.
In the column Non-Equity Incentive Plan
Compensation, we disclose amounts earned under our 2008 IC
Plan. No incentive awards were earned for 2009 under the plan.
The amounts included with respect to any particular fiscal year
are dependent on whether the achievement of the relevant
performance measure was satisfied during the fiscal year.
In the column Change in Pension Value and Non-Qualified
Earnings, we disclose the aggregate change in the
actuarial present value of the NEOs accumulated benefit
under all defined benefit and actuarial benefit plans (including
supplemental plans) in 2009.
In the column All Other Compensation, we disclose
the sum of the dollar value of all perquisites and other
personal benefits, or property, unless the aggregate amount of
such compensation is less than $10,000.
The Company currently has employment agreements with
Messrs. Beck, Collar, Muehlhaeuser, Richenhagen and
Veltmaat. The employment contracts provide for current base
salaries at the following rates per annum:
Mr. Beck $418,850; Mr. Collar
$320,000; Mr. Muehlhaeuser 511,872 Swiss francs
(which is currently equivalent to $494,264);
Mr. Richenhagen $1,054,000; and
Mr. Veltmaat $472,712. Messrs. Beck,
Collar, Muehlhaeuser, Richenhagen and Veltmatts employment
contracts continue in effect until terminated in accordance with
the terms of the contract.
27
In addition to the specified base salary, the employment
contracts provide that each executive officer shall be entitled
to participate in or receive benefits under the IC Plan. The
contracts further provide that each officer will be entitled to
participate in stock incentive plans, employee benefit plans,
life insurance arrangements and any arrangement generally
available to senior executive officers of the Company, including
certain fringe benefits.
2009
SUMMARY COMPENSATION TABLE
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|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
SSAR
|
|
Plan
|
|
Non-Qualified
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards(1)
|
|
Awards(2)
|
|
Compensation(3)
|
|
Earnings(4)
|
|
Compensation(5)
|
|
Total
|
Name and Principle Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Andrew H. Beck, Senior Vice President Chief
Financial Officer
|
|
|
2007
|
|
|
|
353,002
|
|
|
|
|
|
|
|
803,670
|
|
|
|
212,375
|
|
|
|
447,253
|
|
|
|
393,613
|
|
|
|
31,637
|
|
|
|
2,241,550
|
|
|
|
|
2008
|
|
|
|
402,183
|
|
|
|
|
|
|
|
415,954
|
|
|
|
102,856
|
|
|
|
339,443
|
|
|
|
221,461
|
|
|
|
32,054
|
|
|
|
1,513,951
|
|
|
|
|
2009
|
|
|
|
418,850
|
|
|
|
|
|
|
|
364,650
|
|
|
|
110,880
|
|
|
|
|
|
|
|
369,287
|
|
|
|
40,712
|
|
|
|
1,304,379
|
|
Gary L. Collar, Senior Vice President and General Manager EAME
and Australia/
New
Zealand(6)
|
|
|
2007
|
|
|
|
271,801
|
|
|
|
|
|
|
|
803,670
|
|
|
|
212,375
|
|
|
|
219,626
|
|
|
|
105,440
|
|
|
|
409,511
|
|
|
|
2,022,423
|
|
|
|
|
2008
|
|
|
|
306,667
|
|
|
|
|
|
|
|
415,954
|
|
|
|
102,856
|
|
|
|
208,270
|
|
|
|
105,737
|
|
|
|
373,948
|
|
|
|
1,513,432
|
|
|
|
|
2009
|
|
|
|
320,000
|
|
|
|
|
|
|
|
364,650
|
|
|
|
110,880
|
|
|
|
|
|
|
|
167,077
|
|
|
|
291,881
|
|
|
|
1,254,488
|
|
Hubertus M. Muehlhaeuser, Senior Vice President
Strategy & Integration and General Manager, Eastern
Europe &
Asia(7)
|
|
|
2007
|
|
|
|
403,564
|
|
|
|
|
|
|
|
654,150
|
|
|
|
127,425
|
|
|
|
258,120
|
|
|
|
42,446
|
|
|
|
23,925
|
|
|
|
1,509,630
|
|
|
|
|
2008
|
|
|
|
467,629
|
|
|
|
|
|
|
|
284,900
|
|
|
|
67,080
|
|
|
|
222,685
|
|
|
|
72,189
|
|
|
|
71,498
|
|
|
|
1,185,981
|
|
|
|
|
2009
|
|
|
|
472,004
|
|
|
|
|
|
|
|
364,650
|
|
|
|
110,880
|
|
|
|
|
|
|
|
54,114
|
|
|
|
63,072
|
|
|
|
1,064,720
|
|
Martin H. Richenhagen, Chairman, President and Chief Executive
Officer
|
|
|
2007
|
|
|
|
1,004,000
|
|
|
|
|
|
|
|
3,551,100
|
|
|
|
849,500
|
|
|
|
1,888,524
|
|
|
|
620,887
|
|
|
|
137,312
|
|
|
|
8,051,323
|
|
|
|
|
2008
|
|
|
|
1,024,833
|
|
|
|
|
|
|
|
2,849,000
|
|
|
|
704,340
|
|
|
|
1,124,447
|
|
|
|
656,910
|
|
|
|
134,136
|
|
|
|
6,493,666
|
|
|
|
|
2009
|
|
|
|
1,054,000
|
|
|
|
|
|
|
|
2,885,025
|
|
|
|
863,940
|
|
|
|
|
|
|
|
948,352
|
|
|
|
102,386
|
|
|
|
5,853,703
|
|
Hans-Bernd Veltmaat, Senior Vice President
Manufacturing &
Quality(8)
|
|
|
2009
|
|
|
|
448,972
|
|
|
|
|
|
|
|
235,950
|
|
|
|
69,300
|
|
|
|
|
|
|
|
|
|
|
|
192,914
|
|
|
|
947,136
|
|
|
|
|
(1) |
|
Stock Awards for 2007 |
|
|
|
In 2007, awards were granted under a three-year performance
cycle under the PSP. The amounts above reflect the aggregate
grant date fair value computed in accordance with FASB ASC Topic
718 in relation to the 2007 three-year performance cycle at the
probable outcome of the performance conditions, or
target level, at the date of grant. The actual
amounts earned under the 2007- 2009 three-year performance cycle
differ as previously disclosed, and were dependent upon the
achievement of pre-established performance goals. Assuming the
maximum level of performance conditions at the date of grant
(which were actually achieved), the following would be the value
of the award on the date of grant: Mr. Beck
$1,607,340; Mr. Collar $1,607,340;
Mr. Muehlhaeuser $1,308,300; and
Mr. Richenhagen $7,102,200. Values of awards on
the date vested are disclosed within SSAR/Option Exercises
and Stock Vested in 2009. |
|
|
|
Stock Awards for 2008 |
|
|
|
In 2008, awards were granted under a three-year performance
cycle under the PSP. The amounts above reflect the aggregate
grant date fair value computed in accordance with FASB ASC Topic
718 in relation to the 2008 three-year performance cycle at the
probable outcome of the performance conditions, or
target level, at the date of grant. The actual
amounts that will be earned under the
2008-2010
three-year performance cycle are dependent upon the achievement
of pre-established performance goals. Assuming the maximum level
of performance conditions at the date of grant, the following
would be the value of the award on the date of grant:
Mr. Beck $831,908; Mr. Collar
$831,908; Mr. Muehlhaeuser $569,800;
Mr. Richenhagen $5,698,000 and
Mr. Veltmaat $518,200. |
|
|
|
Stock Awards for 2009 |
|
|
|
In 2009, awards were granted under a three-year performance
cycle under the PSP. The amounts above reflect the aggregate
grant date fair value computed in accordance with FASB ASC Topic
718 in relation to the 2009 three-year performance cycle at the
probable outcome of the performance conditions, or
target level, at the |
28
|
|
|
|
|
date of grant. The actual amounts that will be earned under the
2009-2011
three-year performance cycle are dependent upon the achievement
of pre-established performance goals. Assuming the maximum level
of performance conditions at the date of grant, the following
would be the value of the award on the date of grant:
Mr. Beck $729,300; Mr. Collar
$729,300; Mr. Muehlhaeuser $729,300;
Mr. Richenhagen $5,770,050 and
Mr. Veltmaat $471,900. |
|
(2) |
|
SSAR Awards for 2007 |
|
|
|
SSARs were awarded February 15, 2007. The SSARs vest over
four years from the date of grant, or 25% per year. The amounts
above reflect the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718. |
|
|
|
SSAR Awards for 2008 |
|
|
|
SSARs were awarded January 23, 2008. The SSARs vest over
four years from the date of grant, or 25% per year. The amounts
above reflect the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718. |
|
|
|
SSAR Awards for 2009 |
|
|
|
SSARs were awarded January 21, 2009. The SSARs vest over
four years from the date of grant, or 25% per year. The amounts
above reflect the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718. |
|
(3) |
|
Non-Equity Incentive Plan Compensation for 2007 |
|
|
|
The Company paid no discretionary bonuses or bonuses based on
performance metrics that were not pre-established and
communicated to the NEOs in 2007. All annual incentive awards
for 2007 were performance-based. These payments were earned in
2007 and paid in March 2008 under the IC Plan. |
|
|
|
Non-Equity Incentive Plan Compensation for 2008 |
|
|
|
The Company paid no discretionary bonuses or bonuses based on
performance metrics that were not pre-established and
communicated to the NEOs in 2008. All annual incentive awards
for 2008 were performance-based. These payments were earned in
2008 and paid in March 2009 under the 2008 IC Plan. |
|
|
|
Non-Equity Incentive Plan Compensation for 2009 |
|
|
|
The Company paid no discretionary bonuses or bonuses based on
performance metrics that were not pre-established and
communicated to the NEOs in 2009. No annual incentive awards for
2009 were earned under the 2008 IC Plan. |
|
(4) |
|
The change in each officers pension value is the change in
the Companys obligation to provide pension benefits (at a
future retirement date) from the beginning of the fiscal year to
the end of the fiscal year. The obligation is the value today of
a benefit that will be paid at the officers normal
retirement age, based on the benefit formula and his or her
current salary and service. |
|
|
|
Change in pension values during the year may be due to various
sources such as: |
|
|
|
Service accruals: The benefits
payable from the 2007 ENPP increase as participants earn
additional years of service. Therefore, as each executive
officer earns an additional year of service during the fiscal
year, the benefit payable at retirement increases. Each of the
NEOs who participates in the 2007 ENPP earned an additional year
of benefit service during 2009.
|
|
|
|
Compensation increases/decreases since prior
year: The benefits payable from the 2007 ENPP are
related to salary. As executive officers salaries increase
(decrease), then the expected benefits payable from the 2007
ENPP will increase (decrease) as well.
|
|
|
|
Aging: The amounts shown above are
present values of retirement benefits that will be paid in the
future. As the officers approach retirement, the present value
of the liability increases due to the fact that the executive
officer is one year closer to retirement than he was at the
prior measurement date.
|
|
|
|
Changes in assumptions: The
amounts shown in the Pension Benefits Table are present values
of retirement benefits that will be paid in the future. The
discount rate used to determine the present value is updated
each year based on current economic conditions. This assumption
does not impact the actual benefits paid to
|
29
|
|
|
|
|
participants. The discount rate decreased from 2008 to 2009,
which resulted in an increase in the present value of the
officers benefits. |
|
|
|
The pension benefits and assumptions used to calculate these
values are described in more detail under the caption
Pension Benefits. |
|
(5) |
|
The amount shown as All Other Compensation includes
the following perquisites and personal benefits for the year
ended December 31, 2009: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Split
|
|
Foreign
|
|
|
|
|
|
|
|
|
|
|
Defined
|
|
Dollar
|
|
Subsidiary
|
|
Car Lease
|
|
|
|
|
|
|
Club
|
|
Contribution
|
|
Life
|
|
Advisory
|
|
and
|
|
|
|
|
|
|
Membership
|
|
Match
|
|
Insurance(a)
|
|
Board(b)
|
|
Maintenance(c)
|
|
Other(d)
|
|
Total
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Andrew H. Beck
|
|
|
6,480
|
|
|
|
11,025
|
|
|
|
2,890
|
|
|
|
|
|
|
|
12,580
|
|
|
|
7,737
|
|
|
|
40,712
|
|
Gary L. Collar
|
|
|
|
|
|
|
11,025
|
|
|
|
3,603
|
|
|
|
27,856
|
|
|
|
47,821
|
|
|
|
201,576
|
|
|
|
291,881
|
|
Hubertus M. Muehlhaeuser
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,856
|
|
|
|
34,441
|
|
|
|
775
|
|
|
|
63,072
|
|
Martin H. Richenhagen
|
|
|
6,516
|
|
|
|
11,025
|
|
|
|
16,631
|
|
|
|
55,712
|
|
|
|
11,537
|
|
|
|
965
|
|
|
|
102,386
|
|
Hans-Bernd Veltmaat
|
|
|
3,180
|
|
|
|
1,182
|
|
|
|
5,879
|
|
|
|
|
|
|
|
24,717
|
|
|
|
157,956
|
|
|
|
192,914
|
|
|
|
|
|
|
(a) These amounts represent the value of the benefit to the
executive officer for life insurance policies funded by the
Company.
|
|
|
|
(b) These amounts represent compensation for the
executives services provided as members of a foreign
subsidiarys supervisory board.
|
|
|
|
(c) These amounts represent car lease payments made by the
Company for cars used by executives and/or their family members,
as well as payments for related gas and maintenance costs.
|
|
|
|
(d) The amount for Mr. Beck pertains to commercial
airfare related to attendance by Mr. Becks wife at a
corporate function. The amount for Mr. Collar includes
benefits he received as an expatriate as follows: cost of living
adjustment $51,143; housing allowance
$94,054; tax equalization payments $19,376; storage
fees $8,906; tax preparation fees
$1,250; and home leave allowance related to travel costs for
Mr. Collar and his family to fly back to the United
States $26,072. The amount also includes commercial
airfare related to attendance by Mr. Collars wife at
a corporate function $775. In addition,
Mr. Collars wife accompanied Mr. Collar when the
Companys corporate aircraft was used for business purposes
at no incremental cost. The amount for Mr. Muehlhaeuser
pertains to commercial airfare related to attendance by
Mr. Muehlhaeusers wife at a corporate function. In
addition, Mr. Muehlhaeusers wife accompanied
Mr. Muehlhaeuser when the Companys corporate aircraft
was used for business purposes at no incremental cost. The
amount for Mr. Richenhagen pertains to commercial airfare
related to attendance by Mr. Richenhagens wife at a
corporate function. In addition, Mr. Richenhagens
wife accompanied Mr. Richenhagen when the Companys
corporate aircraft was used for business purposes at no
incremental cost. The amount for Mr. Veltmaat includes
benefits he received related to his relocation from Switzerland
to the United States during 2009 as follows: relocation
expenses $118,453; housing allowance
$38,728. In addition, the amount includes commercial airfare
related to attendance by Mr. Veltmaats wife at a
corporate function $775.
|
|
|
|
(6) |
|
Mr. Collar, as an expatriate who is based in Switzerland,
is partially paid in Swiss francs. In calculating the dollar
equivalent for disclosure purposes, we converted each payment
into U.S. dollars based on the average exchange rate in effect
for the month in which the payment was made. |
|
(7) |
|
Mr. Muehlhaeuser, as a Swiss-based employee, is paid in
Swiss francs. In calculating the dollar equivalent for
disclosure purposes, we converted each payment into U.S. dollars
based on the average exchange rate in effect for the month in
which the payment was made. |
|
(8) |
|
Mr. Veltmaat, was a Swiss-based employee for a portion of
2009, and was therefore paid in Swiss-francs during that time.
In calculating the dollar equivalent for disclosure purposes, we
converted each payment into U.S. dollars based on the average
exchange rate in effect for the month in which the payment was
made. |
30
2009
GRANTS OF PLAN-BASED AWARDS
In this table, we provide information concerning each grant of
an award made to an NEO in the most recently completed fiscal
year. This includes the awards under the Companys 2008 IC
Plan, as well as PSP awards and SSARs under the 2006 LTI Plan,
each of which is discussed in greater detail under the caption
Compensation Discussion and Analysis. The
Threshold, Target and
Maximum columns reflect the range of estimated
payouts under the 2008 IC Plan and the range of number of shares
to be awarded under the PSP. In the third- and
second-to-last
columns, we report the number of shares of Common Stock
underlying SSARs granted in the fiscal year and corresponding
per share exercise price. In all cases, the exercise price was
equal to the closing market price of the Companys Common
Stock on the date of grant. In the last column, we report the
aggregate FASB ASC Topic 718 grant date fair value of all SSAR
awards made in 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Under Equity Incentive Plan
|
|
|
Securities
|
|
|
Exercise
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive Plan
Awards(1)
|
|
|
Awards(2)
|
|
|
Underlying
|
|
|
Price
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
SSARs
|
|
|
of SSAR
|
|
|
of SSAR
|
|
|
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
(# of
|
|
|
(# of
|
|
|
(# of
|
|
|
Compensation
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
Award Type
|
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
shares)
|
|
|
shares)
|
|
|
shares)
|
|
|
(#)
|
|
|
($/sh)
|
|
|
($)
|
|
|
Andrew H. Beck
|
|
|
IC Plan
|
|
|
|
1/21/2009
|
|
|
|
167,540
|
|
|
|
418,850
|
|
|
|
628,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,667
|
|
|
|
17,000
|
|
|
|
34,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
21.45
|
|
|
|
110,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary L. Collar
|
|
|
IC Plan
|
|
|
|
1/21/2009
|
|
|
|
89,600
|
|
|
|
224,000
|
|
|
|
336,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,667
|
|
|
|
17,000
|
|
|
|
34,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
21.45
|
|
|
|
110,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hubertus M. Muehlhaeuser
|
|
|
IC Plan
|
|
|
|
1/21/2009
|
|
|
|
132,161
|
|
|
|
330,403
|
|
|
|
495,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,667
|
|
|
|
17,000
|
|
|
|
34,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
21.45
|
|
|
|
110,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin H. Richenhagen
|
|
|
IC Plan
|
|
|
|
1/21/2009
|
|
|
|
548,080
|
|
|
|
1,370,200
|
|
|
|
2,055,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,833
|
|
|
|
134,500
|
|
|
|
269,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,500
|
|
|
|
21.45
|
|
|
|
863,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hans-Bernd Veltmaat
|
|
|
IC Plan
|
|
|
|
1/21/2009
|
|
|
|
89,794
|
|
|
|
224,486
|
|
|
|
336,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,667
|
|
|
|
11,000
|
|
|
|
22,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR Awards
|
|
|
|
1/21/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
21.45
|
|
|
|
69,300
|
|
|
|
|
(1) |
|
The amounts included in the table above represent the potential
payout levels related to corporate and personal objectives for
fiscal year 2009 under the Companys IC Plan. For 2009, the
Committee determined that the Company did not achieve the
minimum performance levels for EPS to warrant an incentive
payout. As a result, no bonuses were paid to NEOs or other
participants under the IC Plan. |
|
(2) |
|
The amounts shown represent the number of shares the executive
would receive if the Threshold, Target
and Maximum levels of performance are reached. |
31
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2009
The following table provides information concerning unexercised
SSARs, and stock that has not been earned or vested for each NEO
outstanding as of the end of the Companys most recently
completed fiscal year. Each outstanding award is represented by
a separate row that indicates the number of securities
underlying the award.
For SSAR/option awards, the table discloses the exercise price
and the expiration date. For stock awards, the table provides
the total number of shares of stock that have not vested (or
have not been earned) and the aggregate market value of shares
of stock that have not vested (or have not been earned).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
Number
|
|
Value of
|
|
Unearned
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
of Shares
|
|
Shares
|
|
Shares,
|
|
|
|
|
Number of
|
|
Number of
|
|
Number
|
|
|
|
|
|
or Units
|
|
or Units
|
|
Units or
|
|
|
|
|
Securities
|
|
Securities
|
|
of Securities
|
|
|
|
|
|
of Stock
|
|
of Stock
|
|
Other
|
|
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
That
|
|
That
|
|
Rights
|
|
Value
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
SSAR
|
|
|
|
Have
|
|
Have
|
|
That
|
|
Realized
|
|
|
SSARs
|
|
SSARs
|
|
Unearned
|
|
Exercise
|
|
SSAR
|
|
Not
|
|
Not
|
|
Have Not
|
|
on
|
|
|
Exercisable
|
|
Unexercisable(1)
|
|
SSARs
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested(2)
|
|
Vested(3)
|
|
Vesting(4)
|
Name
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Andrew H. Beck
|
|
|
9,375
|
|
|
|
3,125
|
|
|
|
|
|
|
|
23.80
|
|
|
|
4/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,250
|
|
|
|
6,250
|
|
|
|
|
|
|
|
37.38
|
|
|
|
2/15/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,150
|
|
|
|
3,450
|
|
|
|
|
|
|
|
56.98
|
|
|
|
1/23/2015
|
|
|
|
|
|
|
|
|
|
|
|
7,300
|
|
|
|
415,954
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
21.45
|
|
|
|
1/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
|
|
|
364,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary L. Collar
|
|
|
3,125
|
|
|
|
3,125
|
|
|
|
|
|
|
|
23.80
|
|
|
|
4/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,125
|
|
|
|
6,250
|
|
|
|
|
|
|
|
37.38
|
|
|
|
2/15/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,150
|
|
|
|
3,450
|
|
|
|
|
|
|
|
56.98
|
|
|
|
1/23/2015
|
|
|
|
|
|
|
|
|
|
|
|
7,300
|
|
|
|
415,954
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
21.45
|
|
|
|
1/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
|
|
|
364,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hubertus M. Muehlhaeuser
|
|
|
5,625
|
|
|
|
1,875
|
|
|
|
|
|
|
|
23.80
|
|
|
|
4/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
|
|
|
3,750
|
|
|
|
|
|
|
|
37.38
|
|
|
|
2/15/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750
|
|
|
|
2,250
|
|
|
|
|
|
|
|
56.98
|
|
|
|
1/23/2015
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
284,900
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
21.45
|
|
|
|
1/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
|
|
|
364,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin H. Richenhagen
|
|
|
25,000
|
|
|
|
12,500
|
|
|
|
|
|
|
|
23.80
|
|
|
|
4/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
|
|
|
|
37.38
|
|
|
|
2/15/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,875
|
|
|
|
23,625
|
|
|
|
|
|
|
|
56.98
|
|
|
|
1/23/2015
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
2,849,000
|
|
|
|
|
|
|
|
|
93,500
|
|
|
|
|
|
|
|
21.45
|
|
|
|
1/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
134,500
|
|
|
|
2,885,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,839
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,010
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hans-Bernd Veltmaat
|
|
|
750
|
|
|
|
2,250
|
|
|
|
|
|
|
|
51.82
|
|
|
|
7/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
259,100
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
21.45
|
|
|
|
1/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
|
|
235,950
|
|
|
|
|
(1) |
|
SSAR awards vest ratably, or 25% annually, over four years
beginning from the date of grant, which was April 27, 2006
for the 2006 grants of SSARs, February 15, 2007 for the
2007 grants of SSARs, January 23, 2008 for the 2008 grants
of SSARs and January 21, 2009 for the 2009 grants of SSARs.
Mr. Veltmaats grant during 2008 was made on his date
of hire, which was July 1, 2008. |
|
(2) |
|
The retention-based restricted stock award granted to
Mr. Richenhagen on December 6, 2007 was for
28,839 shares and was based on the price of the
Companys Common Stock on December 6, 2007, which was
$69.35 per share. The retention-based restricted stock award
granted to Mr. Richenhagen on December 5, 2008 was for
99,010 shares and was based on the price of the
Companys Common Stock on December 5, 2008, which was
$20.20 per share. |
|
(3) |
|
The amounts shown represent the number of shares awarded under
the PSP in January 2008 and January 2009, respectively. The
actual amounts that will be earned under the PSP are dependent
upon the achievement of pre-established performance goals during
the respective three-year performance cycles. |
|
(4) |
|
Based on the price of the Companys Common Stock on the
date of grant, which was $56.98 per share on January 23,
2008 and $21.45 per share on January 21, 2009.
Mr. Veltmaats grant during 2008 was made on
July 1, 2008, when the price of the Companys common
stock was $51.82 per share. |
32
SSAR/OPTION
EXERCISES AND STOCK VESTED IN 2009
The following table provides information concerning exercises of
stock options, SSARs and similar instruments, and vesting of
stock awards including restricted stock and similar instruments,
during the most recently completed fiscal year for each of the
NEOs. The table reports the number of securities for which the
options were exercised; the aggregate dollar value realized upon
exercise of options and SSARs; the number of shares of stock
that have vested; and the aggregate dollar value realized upon
vesting of stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR/Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
Value Realized on
|
|
Number of Shares
|
|
Value Realized
|
|
|
Acquired on Exercise
|
|
Exercise
|
|
Acquired on
Vesting(1)
|
|
on Exercise
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Andrew H. Beck
|
|
|
|
|
|
|
|
|
|
|
43,000
|
|
|
|
1,472,750
|
|
Gary L. Collar
|
|
|
|
|
|
|
|
|
|
|
43,000
|
|
|
|
1,472,750
|
|
Hubertus M. Muehlhaeuser
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
1,198,750
|
|
Martin H. Richenhagen
|
|
|
|
|
|
|
|
|
|
|
190,000
|
|
|
|
6,507,500
|
|
Hans-Bernd Veltmaat
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Shares withheld for income tax purposes were as follows:
Mr. Richenhagen 80,655;
Mr. Beck 18,321 shares;
Mr. Collar 18,350 shares; and
Mr. Muehlhaeuser 1,768 shares. |
PENSION
BENEFITS
The 2009 Pension Benefits Table provides further
details regarding the executive officers defined benefit
retirement plan benefits. Because the pension amounts shown in
the 2009 Summary Compensation Table and the
2009 Pension Benefits Table are projections of
future retirement benefits, numerous assumptions must be
applied. In general, the assumptions should be the same as those
used to calculate the pension liabilities in accordance with
SFAS No. 87, Employers Accounting for Pensions,
on the measurement date, although the SEC specifies certain
exceptions, as noted in the table below.
Executive
Nonqualified Pension Plan
The 2007 ENPP provides the Companys
U.S.-based
executives with retirement income for a period of 15 years
based on a percentage of their final average compensation
including base salary and annual incentive bonus, reduced by the
executives social security benefits and savings plan
benefits attributable to employer matching contributions.
The key provisions of the 2007 ENPP are as follows:
Monthly Benefit. Senior executives with a
vested benefit will be eligible to receive the following
retirement benefits each month for 15 years beginning on
their normal retirement date (age 65): 3% of final average
monthly compensation times years of service up to 20 years,
reduced by each of (i) the senior executives
U.S. social security benefit or similar government
retirement program to which the senior executive is eligible,
(ii) the benefits payable from the AGCO Savings Plan
(payable as a life annuity) attributable to the Companys
matching contributions and earnings thereon, and (iii) the
benefits payable from any retirement plan sponsored by the
Company in any foreign country attributable to the
Companys contributions.
Final Average Monthly Compensation. The final
average monthly compensation is the average of the three years
of base salary and annual incentive payments under the 2008 IC
Plan paid to the executive during the three years prior to his
or her death, termination or retirement.
Vesting. Participants become vested after
meeting all three of the following requirements: (i) turn
age 50; (ii) completing ten years of service with the
Company; and (iii) achieve five years of participation in
the 2007 ENPP. Alternatively, all participants will become
vested in the plan in the event of a change of control of the
Company, and, in addition, Mr. Richenhagen will become
vested in the plan in the event of his involuntary termination
without
33
cause, his resignation for good reason or his termination as a
result of the Company not renewing his employment agreement.
Early Retirement Benefits. Participants may
not receive retirement benefits prior to normal retirement age
unless the participant dies.
Swiss
Life Collective BVG Foundation
The Swiss Life Collective BVG Foundation
(BVG) operates a pension fund in Switzerland, for
which Mr. Muehlhaeuser is a participant. The Foundation
ensures the plan meets at least the mandated requirements for
minimum pension benefits. This plan is a cash balance formula,
with contributions made both by the Company and
Mr. Muehlhaeuser. Mr. Muehlhaeusers total
account balance represents contributions and interest made by
the Company, as well as from his prior employers. The amounts
shown in the tables throughout this proxy reflect the portion of
account balance attributable to contributions made while
employed by the Company.
The key provisions of the BVG plan are as follows:
Retirement benefit. Upon retirement,
participants will receive the value of their cash balance
account. They may elect to receive their benefit as a lump sum
or as an annuity. The cash balance account grows each year with
pay credits (payable by the employee and the employer) and
interest.
Pay credits. Each year, a participants
cash balance account is credited with the following percentage
of pensionable pay (varies by age):
|
|
|
|
|
|
|
|
|
|
|
Credit as a percentage of pay
|
|
Credit as a percentage of pay
|
Age
|
|
(paid by the Company)
|
|
(paid by employee)
|
|
25 - 34
|
|
|
4.0
|
%
|
|
|
4.0
|
%
|
35 - 44
|
|
|
5.5
|
%
|
|
|
5.5
|
%
|
45 - 54
|
|
|
8.0
|
%
|
|
|
8.0
|
%
|
Pensionable pay. Payable at the annual rate of
base pay.
Normal Retirement Age. Age 65 for males;
age 64 for females (as in accordance with Swiss law).
Early Retirement Benefits. Participants may
elect to retire up to five years prior to Normal Retirement Age.
Annuity benefits are converted using reduced actuarial
equivalence conversion factors.
34
2009
PENSION BENEFITS TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Present
|
|
Payments
|
|
|
|
|
Years of
|
|
Value of
|
|
During
|
|
|
|
|
Credited
|
|
Accumulated
|
|
Last Fiscal
|
|
|
|
|
Service
|
|
Benefit(1)
|
|
Year
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|
Andrew H. Beck
|
|
AGCO executive nonqualified Pension Plan
|
|
|
15.42
|
|
|
|
986,078
|
|
|
|
|
|
Gary L. Collar
|
|
AGCO executive nonqualified Pension Plan
|
|
|
7.67
|
|
|
|
379,542
|
|
|
|
|
|
Hubertus M.
Muehlhaeuser(2)(3)
|
|
Swiss Life Collective BVG Foundation
|
|
|
4.33
|
|
|
|
223,030
|
|
|
|
|
|
Martin H. Richenhagen
|
|
AGCO executive nonqualified Pension Plan
|
|
|
5.75
|
|
|
|
2,407,695
|
|
|
|
|
|
Hans-Bernd
Veltmaat(4)
|
|
AGCO executive nonqualified Pension Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Based on plan provisions in effect as of December 31, 2009.
The executive officers participate in pension plans that will
provide a monthly annuity benefit upon retirement. The values
shown in this column are the estimated lump sum value today of
the monthly benefits they will receive in the future (based on
their current salary and service, as well as the assumptions and
methods prescribed by the SEC). These values are not the monthly
or annual benefits that they would receive. |
|
(2) |
|
Mr. Muehlhaeusers benefits include both employer and
employee-provided contributions. |
|
(3) |
|
Mr. Muehlhaeusers BVG benefits were converted from
Swiss Francs to U.S. dollars based on the exchange rate in
effect as of December 31, 2009. |
|
(4) |
|
Mr. Veltmaat earned a benefit in the BVG Foundation while
he was employed by AGCO in Switzerland. On July 31, 2009,
his BVG benefit of $78,294 was transferred to Swiss Life
insurance company due to his employment transfer to the United
States. He did not receive his account balance during 2009.
While Mr. Veltmaat is still entitled to receive this
benefit from Swiss Life, the benefit is no longer part of a plan
that AGCO sponsors. AGCO has no future obligation to make any
future contributions to fund Mr. Veltmaats BVG
benefit unless he transfers back to Switzerland and begins
earning future benefits in the plan. Barring such a transfer,
Swiss Life is responsible for any future interest that will be
credited to Mr. Veltmaats account after July 31,
2009. |
35
OTHER
POTENTIAL POST-EMPLOYMENT PAYMENTS
Each NEOs employment agreement with the Company includes
provisions for post-employment compensation related to certain
employment termination events. Pursuant to the 2006 LTI Plan,
all outstanding equity awards become fully vested and
exercisable upon a change of control. The 2006 LTI Plan does not
provide for accelerated vesting of equity under other employment
termination events. The tables below and their accompanying
footnotes provide specific detail on the post-employment
compensation each NEO is entitled to in the event of certain
employment termination events.
Andrew H. Beck, Senior Vice President
Chief Financial Officer, would have received the following
payments if he had terminated on the last day of the prior
fiscal year (December 31, 2009) under the following
termination scenarios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Scenario(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
Change of
|
|
Without Good
|
|
|
|
|
|
|
|
Involuntary
|
|
Reason
|
|
|
Control(2)
|
|
Reason(3)
|
|
Retirement(4)
|
|
Death(5)
|
|
Disability(6)
|
|
with
Cause(7)
|
|
Resignation(8)
|
Compensation Components
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Severance
|
|
1,362,163
|
|
|
|
|
|
104,713
|
|
|
|
|
|
837,700
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Equity
|
|
2,413,912
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits (Health, Life, etc.)
|
|
75,330
|
|
|
|
|
|
3,373
|
|
|
|
|
|
75,330
|
Retirement Benefits
|
|
633,416
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefit
|
|
|
|
|
|
|
|
2,513,100
|
|
|
|
|
|
|
Disability Benefit
|
|
|
|
|
|
|
|
|
|
426,816
|
|
|
|
|
280G Tax
Gross-Up(9)
|
|
370,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Total
|
|
$4,854,911
|
|
$
|
|
$
|
|
$2,621,186
|
|
$426,816
|
|
$
|
|
$913,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All termination scenarios assume termination occurs on
December 31, 2009 at a stock price of $32.34, the closing
price of the Companys Common Stock as of December 31,
2009 (which was the last business day of the year). |
|
(2) |
|
Within two years following a change of control, Mr. Beck
receives a lump sum payment equal to (i) two times his base
salary in effect at the time of termination, (ii) a
pro-rata portion of his bonus or other incentive compensation
earned for the year of termination and (iii) a bonus equal
to two times the three year average of Mr. Becks
awards received during the prior two completed fiscal years and
the current fiscal years trend. He continues to receive
life insurance and healthcare benefits during a two-year period.
All outstanding equity awards held by Mr. Beck at the time
of a change of control become non-cancelable, fully vested and
exercisable, and all performance goals associated with any
awards are deemed satisfied with respect to the greater of
target performance or the level dictated by the trend of the
Companys performance to date, so that all compensation is
immediately vested and payable. In the case of a change of
control, the retirement benefits are payable as a lump sum six
months after termination of employment or, if such termination
occurs more than twenty-four months after the change of control,
in accordance with the terms of the 2007 ENPP. The difference
between the Retirement Benefits value shown above
($633,416) and the value shown in the 2009 Pension
Benefits Table ($986,078) is due to the fact that the
interest and mortality assumptions prescribed by the plan in the
event of a change of control are different from the assumptions
used in the actuarial valuation. This termination scenario has
factored in a non-compete covenant, thus reducing the severance
amount by the presumed value of the covenant not to compete. |
|
(3) |
|
If Mr. Beck voluntarily resigns without good reason, he
only receives his base salary through the date of termination. |
|
(4) |
|
Mr. Beck is not eligible for retirement benefits as of
December 31, 2009. |
|
(5) |
|
Upon death, Mr. Becks estate is entitled to receive
Mr. Becks base salary in effect at the time of death
for a period of three months, as well as continuation of
healthcare benefits for a three-month period. His estate is also
entitled to all sums payable to Mr. Beck through the end of
the month in which death occurs, including the |
36
|
|
|
|
|
pro-rata
portion of his bonus earned at this time. The Death
Benefit amount represents the value of the insurance
proceeds payable upon death. |
|
(6) |
|
In the event of termination of employment due to disability,
Mr. Beck receives all sums otherwise payable to him by the
Company through the date of disability, including the pro-rata
portion of his bonus earned upon disability. The
Disability Benefit amount represents the annual
value of the insurance proceeds payable to the executive on a
monthly basis upon disability. |
|
(7) |
|
If Mr. Becks employment is terminated with cause, he
only receives his base salary through the date of termination. |
|
(8) |
|
Unless such termination occurs within two years following a
change of control, if Mr. Becks employment is
terminated without cause or if he voluntarily resigns with good
reason, Mr. Beck receives his base salary in effect at the
time of termination for a two-year severance period, paid at the
same intervals as if he had remained employed with the Company.
He also receives a pro-rata portion of his bonus earned for the
year of termination, which is payable at the time incentive
compensation is generally payable by the Company. He continues
to receive life insurance and healthcare benefits during the
two-year severance period. |
|
(9) |
|
The Company provides a full
gross-up
for taxes due on any payments to the executive in the event of a
change of control. |
Mr. Becks employment agreement provides certain
restrictive covenants that continue for a period of two years
after termination of employment, including a non-competition
covenant, a non-solicitation of customers covenant and a
non-solicitation of Company personnel covenant. If Mr. Beck
breaches his post-employment obligations under these covenants,
the Company may terminate the severance period and discontinue
any further payments or benefits to Mr. Beck.
Gary L. Collar, Senior Vice President and General
Manager, EAME and Australia/New Zealand, would have received the
following payments if he had terminated on the last day of the
prior fiscal year (December 31, 2009) under the
following termination scenarios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Scenario(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
Change of
|
|
Without Good
|
|
|
|
|
|
|
|
Involuntary
|
|
Reason
|
|
|
Control(2)
|
|
Reason(3)
|
|
Retirement(4)
|
|
Death(5)
|
|
Disability(6)
|
|
with
Cause(7)
|
|
Resignation(8)
|
Compensation Components
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Severance
|
|
925,264
|
|
|
|
|
|
80,000
|
|
|
|
|
|
320,000
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Termination
Allowance(9)
|
|
26,667
|
|
|
|
|
|
26,667
|
|
26,667
|
|
|
|
26,667
|
Accelerated Vesting of Equity
|
|
2,360,537
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits (Health, Life, etc.)
|
|
62,077
|
|
|
|
|
|
2,920
|
|
|
|
|
|
35,276
|
Retirement Benefits
|
|
274,211
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
|
1,920,000
|
|
|
|
|
|
|
Disability Benefit
|
|
|
|
|
|
|
|
|
|
229,524
|
|
|
|
|
280G Tax
Gross-Up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Total
|
|
$3,648,756
|
|
$
|
|
$
|
|
$2,029,587
|
|
$256,191
|
|
$
|
|
$381,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All termination scenarios assume termination occurs on
December 31, 2009 at a stock price of $32.34, the closing
price of the Companys Common Stock as of December 31,
2009 (which was the last business day of the year). |
|
(2) |
|
Within two years following a change of control, Mr. Collar
receives a lump sum payment equal to (i) two times his base
salary in effect at the time of termination, (ii) a
pro-rata portion of his bonus or other incentive compensation
earned for the year of termination and (iii) a bonus equal
to two times the three year average of Mr. Collars
awards received during the prior two completed fiscal years and
the current fiscal years trend. He continues to receive
life insurance and healthcare benefits during a two-year period.
All outstanding equity awards held by Mr. Collar at the
time of a change of control become non-cancelable, fully vested
and exercisable, and all performance goals associated with any
awards are deemed satisfied with respect to the greater of
target performance or the level dictated by the trend of the
Companys performance to date, so that |
37
|
|
|
|
|
all compensation is immediately vested and payable. In the case
of a change of control, the retirement benefits are payable as a
lump sum six months after termination of employment or, if such
termination occurs more than twenty-four months after the change
of control, in accordance with the terms of the ENPP. The
difference between the Retirement Benefits value
shown above ($274,211) and the value shown in the 2009
Pension Benefits Table ($379,542) is due to the fact that
the interest and mortality assumptions prescribed by the plan in
the event of a change of control are different from the
assumptions used in the actuarial valuation. This termination
scenario has factored in a non-compete covenant, thus reducing
the severance amount by the presumed value of the covenant not
to compete. |
|
(3) |
|
If Mr. Collar voluntarily resigns without good reason, he
only receives his base salary through the date of termination. |
|
(4) |
|
Mr. Collar is not eligible for retirement benefits as of
December 31, 2009. |
|
(5) |
|
Upon death, Mr. Collars estate is entitled to receive
Mr. Collars base salary in effect at the time of
death for a three-month period, as well as continuation of
healthcare benefits for a three-month period. His estate is also
entitled to all sums payable to Mr. Collar through the end
of the month in which death occurs, including the pro-rata
portion of his bonus earned at this time. The Death
Benefit amount represents the value of the insurance
proceeds payable upon death. |
|
(6) |
|
In the event of termination of employment due to disability,
Mr. Collar receives all sums otherwise payable to him by
the Company through the date of disability, including the
pro-rata portion of his bonus earned upon disability. The
Disability Benefit amount represents the annual
value of the insurance proceeds payable to the executive on a
monthly basis upon disability. |
|
(7) |
|
If Mr. Collars employment is terminated with cause,
he only receives his base salary through the date of termination. |
|
(8) |
|
Unless such termination occurs within two years following a
change of control, if Mr. Collars employment is
terminated without cause or if he voluntarily resigns with good
reason, Mr. Collar receives his base salary in effect at
the time of termination for a one-year severance period, paid at
the same intervals as if he had remained employed with the
Company. He also receives a pro-rata portion of his bonus earned
for the year of termination, which is payable at the time
incentive compensation is generally payable by the Company. He
continues to receive life insurance and healthcare benefits
during the one-year severance period. |
|
(9) |
|
If Mr. Collars employment is terminated while he is
on international assignment, other than with cause or by
voluntary resignation to accept a position with another
employer, the Company pays the cost associated with the return
of Mr. Collar and his family to the United States,
including the cost of personal transportation and shipment of
household and personal goods. Additionally, the Company provides
up to 30 days temporary living expenses. The additional
termination allowance provided for Mr. Collar represents an
estimated value of this benefit equal to one months base
salary. |
|
(10) |
|
The Company provides a full
gross-up
for taxes due on any payments to the executive in the event of a
change of control. |
Mr. Collars employment agreement provides certain
restrictive covenants that continue for a period of two years
after termination of employment, including a non-competition
covenant, a non-solicitation of customers covenant and a
non-solicitation of Company personnel covenant. If
Mr. Collar breaches his post-employment obligations under
these covenants, the Company may terminate the severance period
and discontinue any further payments or benefits to
Mr. Collar.
38
Hubertus M. Muehlhaeuser, Senior Vice
President Strategy & Integration and
General Manager, Eastern Europe & Asia, would have
received the following payments if he had terminated on the last
day of the prior fiscal year (December 31, 2009) under
the following termination scenarios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Scenario(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
Change of
|
|
Without Good
|
|
|
|
|
|
|
|
Involuntary
|
|
Reason
|
|
|
Control(2)
|
|
Reason(3)
|
|
Retirement(4)
|
|
Death(5)
|
|
Disability(6)
|
|
with
Cause(7)
|
|
Resignation(8)
|
Compensation Components
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Severance
|
|
1,309,065
|
|
|
|
|
|
123,566
|
|
|
|
|
|
494,264
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Equity
|
|
2,038,110
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits (Health, Life, etc.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Benefits
|
|
234,939
|
|
234,939
|
|
|
|
3,200,567
|
|
296,563 annual life annuity until age 65
|
|
234,939
|
|
234,939
|
Death Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Total
|
|
$3,582,114
|
|
$234,939
|
|
$
|
|
$3,324,133
|
|
$296,563
|
|
$234,939
|
|
$729,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All termination scenarios assume termination occurs on
December 31, 2009 at a stock price of $32.34, the closing
price of the Companys Common Stock as of December 31,
2009 (which was the last business day of the year). |
|
(2) |
|
Within two years following a change of control,
Mr. Muehlhaeuser receives a lump sum payment equal to
(i) two times his base salary in effect at the time of
termination, (ii) a pro-rata portion of his bonus or other
incentive compensation earned for the year of termination and
(iii) a bonus equal to two times the three year average of
Mr. Muehlhaeusers awards received during the prior
two completed fiscal years and the current fiscal years
trend. All outstanding equity awards held by
Mr. Muehlhaeuser at the time of a change of control become
non-cancelable, fully vested and exercisable, and all
performance goals associated with any awards are deemed
satisfied with respect to the greater of target performance or
the level dictated by the trend of the Companys
performance to date, so that all compensation is immediately
vested and payable. Mr. Muehlhaeuser also receives a lump
sum amount from the BVG Plan equal to the current value of his
account balance. |
|
(3) |
|
If Mr. Muehlhaeuser voluntarily resigns without good
reason, he receives his base salary through the date of
termination and a lump sum amount from the BVG Plan equal to the
current value of his account balance. |
|
(4) |
|
Mr. Muehlhaeuser is not eligible for retirement benefits as
of December 31, 2009. |
|
(5) |
|
Upon death, Mr. Muehlhaeusers estate is entitled to
receive Mr. Muehlhaeusers base salary in effect at
the time of death for a period of three months. His estate is
also entitled to all sums payable to Mr. Muehlhaeuser
through the end of the month in which death occurs, including
the pro-rata portion of his bonus earned at this time. His
spouse also receives a lump sum amount from the BVG Plan equal
to six times his insured salary. If accidental death should
occur, Mr. Muehlhaeusers retirement benefit would be
$1,849,082. |
|
(6) |
|
In the event of termination of employment due to disability,
Mr. Muehlhaeuser receives all sums otherwise payable to him
by the Company through the date of disability, including the
pro-rata portion of his bonus earned upon disability. He is also
entitled to receive 60% of his salary (approximately $296,563)
annually until he reaches retirement age. Once he reaches
retirement age, he will receive the value in his cash balance
account (accumulated with salary and interest credits). |
|
(7) |
|
If Mr. Muehlhaeusers employment is terminated with
cause, he receives his base salary through the date of
termination and a lump sum amount from the BVG Plan. |
|
(8) |
|
Unless such termination occurs within two years following a
change of control, if Mr. Muehlhaeusers employment is
terminated without cause or if he voluntarily resigns with good
reason, Mr. Muehlhaeuser receives his base salary in effect
at the time of termination for a one-year severance period, paid
at the same intervals as if he had remained employed with the
Company. He also receives a pro-rata portion of his bonus |
39
|
|
|
|
|
earned for the year of termination, which is payable at the time
incentive compensation is generally payable by the Company.
Mr. Muehlhaeuser also receives a lump sum amount from the
BVG Plan equal to the current value of his account balance. |
|
(9) |
|
The Company does not provide a full
gross-up
for taxes due on any payments to the executive in the event of a
change of control. |
The amounts shown above represent the approximate portion of
Mr. Muehlhaeusers BVG benefit attributable to
employer and employee contributions made to the account as an
AGCO employee. Mr. Muehlhaeusers account balance also
includes contributions (with interest) made by his previous
employers. Mr. Muehlhaeusers employment agreement
provides certain restrictive covenants that continue for a one
year period after termination of employment, including a
non-competition covenant, a non-solicitation of customers
covenant and a non-solicitation of Company personnel covenant.
If Mr. Muehlhaeuser breaches his post-employment
obligations under these covenants, the Company may terminate the
severance period and discontinue any further payments or
benefits to Mr. Muehlhaeuser.
Martin H. Richenhagen, Chairman of the Board,
President and Chief Executive Officer, would have received the
following payments if he had terminated on the last day of the
prior fiscal year (December 31, 2009) under the
following termination scenarios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Scenario(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reason
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resignation, or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by Companys
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
Non-Renewal
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
of Executives
|
|
|
Change of
|
|
Without Good
|
|
|
|
|
|
|
|
Involuntary
|
|
Employment
|
|
|
Control(2)
|
|
Reason(3)
|
|
Retirement(4)
|
|
Death(5)
|
|
Disability(6)
|
|
with
Cause(7)
|
|
Agreement(8)
|
Compensation Components
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Severance
|
|
6,174,971
|
|
|
|
|
|
263,500
|
|
|
|
|
|
2,108,000
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Equity
|
|
17,584,432
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits (Health, Life, etc.)
|
|
295,831
|
|
|
|
|
|
29,019
|
|
29,019
|
|
|
|
264,887
|
Retirement Benefits
|
|
1,869,725
|
|
|
|
|
|
|
|
|
|
|
|
1,869,725
|
Death Benefit
|
|
|
|
|
|
|
|
6,324,000
|
|
|
|
|
|
|
Disability Benefit
|
|
|
|
|
|
|
|
|
|
1,743,336
|
|
|
|
|
280G Tax
Gross-Up(9)
|
|
3,123,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Total
|
|
$29,048,515
|
|
$
|
|
$
|
|
$6,616,519
|
|
$1,772,355
|
|
$
|
|
$4,242,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All termination scenarios assume termination occurs on
December 31, 2009 at a closing stock price of $32.34, the
closing price of the Companys Common Stock as of
December 31, 2009 (which was the last business day of the
year). |
|
(2) |
|
Within two years following a change of control,
Mr. Richenhagen receives a lump sum payment equal to
(i) three times his base salary in effect at the time of
termination, (ii) a pro-rata portion of his bonus or other
incentive compensation earned for the year of termination and
(iii) a bonus equal to three times the three-year average
of Mr. Richenhagens awards received during the prior
two completed fiscal years and the current fiscal years
trend. He continues to receive life insurance benefits during a
three-year period, and the Company pays 18 months of COBRA
premiums to continue his group health coverage. Upon a change of
control, all outstanding equity awards held by
Mr. Richenhagen become non-cancelable, fully vested and
exercisable, and all performance goals associated with any
awards are deemed satisfied with respect to the greater of
target performance or the level dictated by the trend of the
Companys performance to date, so that all compensation is
immediately vested and payable. In the case of a change of
control, the retirement benefits are payable as a lump sum six
months after termination of employment or, if such termination
occurs more than twenty-four months after the change in control,
in accordance with the terms of the ENPP. The difference between
the Retirement Benefits value shown above
($1,869,725) from the ENPP and the value shown in the 2009
Pension Benefits Table ($2,407,695) is due to the fact
that the interest and mortality assumptions prescribed by the
plan in the |
40
|
|
|
|
|
event of a change of control are different from the assumptions
used in the actuarial valuation. This termination scenario has
factored in a non-compete covenant, thus reducing the severance
amount by the presumed value of the covenant not to compete. |
|
(3) |
|
If Mr. Richenhagen voluntarily resigns without good reason,
he only receives his base salary through the date of termination. |
|
(4) |
|
Mr. Richenhagen is not eligible for retirement benefits as
of December 31, 2009. |
|
(5) |
|
In the event of Mr. Richenhagens death, his estate
receives Mr. Richenhagens base salary in effect at
the time of death for a period of three months. The estate is
also entitled to all sums payable to Mr. Richenhagen
through the end of the month in which death occurs, including
the pro-rata portion of his bonus earned at this time. The
Company pays 18 months of COBRA premiums to continue group
health coverage. The Death Benefit amount represents
the value of the insurance proceeds payable upon death. |
|
(6) |
|
In the event of termination of employment due to disability,
Mr. Richenhagen receives all sums otherwise payable to him
by the Company through the date of disability, including the
pro-rata portion of his bonus earned upon disability. The
Company pays 18 months of COBRA premiums to continue group
health coverage. The Disability Benefit amount
represents the annual value of the insurance proceeds payable to
the executive on a monthly basis upon disability. |
|
(7) |
|
If Mr. Richenhagens employment is terminated with
cause, he only receives his base salary through the date of
termination. |
|
(8) |
|
Under these termination scenarios, Mr. Richenhagen receives
his base salary for a two-year severance period, which is paid
at the same intervals as if he had remained employed by the
Company. Mr. Richenhagen also receives a pro-rata portion
of his bonus earned for the year of termination, which is
payable at the time incentive compensation is generally payable
by the Company. He continues to receive life insurance benefits
during the two-year severance period, and the Company pays
18 months of COBRA premiums to continue his group health
coverage. In the case of involuntary termination without cause
or good reason resignation, the retirement benefits are payable
as a lump sum six months after termination of employment. |
|
(9) |
|
The Company provides a full
gross-up
for taxes due on any payments to the executive in the event of a
change of control. |
Mr. Richenhagens employment agreement provides
certain restrictive covenants that continue for a period of two
years after termination of employment, including a
non-competition covenant, a non-solicitation of customers
covenant and a non-recruitment of employees covenant. If
Mr. Richenhagen breaches his post-employment obligations
under these covenants, the Company may terminate the severance
period and discontinue any further payments or benefits to
Mr. Richenhagen.
Hans-Bernd Veltmaat, Senior Vice President
Manufacturing & Quality, would have received the following
payments if he had terminated on the last day of the prior
fiscal year (December 31, 2009) under the following
termination scenarios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Scenario(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Without
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
Change of
|
|
Without Good
|
|
|
|
|
|
|
|
Involuntary
|
|
Reason
|
|
|
Control(2)
|
|
Reason(3)
|
|
Retirement(4)
|
|
Death(5)
|
|
Disability(6)
|
|
with
Cause(7)
|
|
Resignation(8)
|
Compensation Components
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Severance
|
|
1,044,074
|
|
|
|
|
|
118,178
|
|
|
|
|
|
472,712
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Equity
|
|
599,115
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits (Health, Life, etc.)
|
|
56,028
|
|
|
|
|
|
2,418
|
|
|
|
|
|
32,081
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
|
2,827,200
|
|
|
|
|
|
|
Disability Benefit
|
|
|
|
|
|
|
|
|
|
246,744
|
|
|
|
|
280G Tax
Gross-Up(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Total
|
|
$1,699,217
|
|
$
|
|
$
|
|
$2,947,796
|
|
$246,744
|
|
$
|
|
$504,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41
|
|
|
(1) |
|
All termination scenarios assume termination occurs on
December 31, 2009 at a stock price of $32.34, the closing
price of the Companys Common Stock as of December 31,
2009 (which was the last business day of the year). |
|
(2) |
|
Within two years following a change of control,
Mr. Veltmaat receives a lump sum payment equal to
(i) two times his base salary in effect at the time of
termination, (ii) a pro-rata portion of his bonus or other
incentive compensation earned for the year of termination and
(iii) a bonus equal to two times the three year average of
Mr. Veltmaats awards received during the prior two
completed fiscal years and the current fiscal years trend.
He continues to receive life insurance and healthcare benefits
during a two-year period. All outstanding equity awards held by
Mr. Veltmaat at the time of a change of control become
non-cancelable, fully vested and exercisable, and all
performance goals associated with any awards are deemed
satisfied with respect to the greater of target performance or
the level dictated by the trend of the Companys
performance to date, so that all compensation is immediately
vested and payable. This termination scenario has factored in a
non-compete covenant, thus reducing the severance amount by the
presumed value of the covenant not to compete. |
|
(3) |
|
If Mr. Veltmaat voluntarily resigns without good reason, he
only receives his base salary through the date of termination. |
|
(4) |
|
Mr. Veltmaat is not eligible for retirement benefits as of
December 31, 2009. |
|
(5) |
|
Upon death, Mr. Veltmaats estate is entitled to
receive Mr. Veltmaats base salary in effect at the
time of death for a three-month period, as well as continuation
of healthcare benefits for a three-month period. His estate is
also entitled to all sums payable to Mr. Veltmaat through
the end of the month in which death occurs, including the
pro-rata portion of his bonus earned at this time. The
Death Benefit amount represents the value of the
insurance proceeds payable upon death. |
|
(6) |
|
In the event of termination of employment due to disability,
Mr. Veltmaat receives all sums otherwise payable to him by
the Company through the date of disability, including the
pro-rata portion of his bonus earned upon disability. The
Disability Benefit amount represents the annual
value of the insurance proceeds payable to the executive on a
monthly basis upon disability. |
|
(7) |
|
If Mr. Veltmaats employment is terminated with cause,
he only receives his base salary through the date of termination. |
|
(8) |
|
Unless such termination occurs within two years following a
change of control, if Mr. Veltmaats employment is
terminated without cause or if he voluntarily resigns with good
reason, Mr. Veltmaat receives his base salary in effect at
the time of termination for a one-year severance period, paid at
the same intervals as if he had remained employed with the
Company. He also receives a pro-rata portion of his bonus earned
for the year of termination, which is payable at the time
incentive compensation is generally payable by the Company. He
continues to receive life insurance and healthcare benefits
during the one-year severance period. |
|
(9) |
|
The Company provides a full
gross-up
for taxes due on any payments to the executive in the event of a
change of control. |
Mr. Veltmaats employment agreement provides certain
restrictive covenants that continue for a period of two years
after termination of employment, including a non-competition
covenant, a non-solicitation of customers covenant and a
non-solicitation of Company personnel covenant. If
Mr. Veltmaat breaches his post-employment obligations under
these covenants, the Company may terminate the severance period
and discontinue any further payments or benefits to
Mr. Veltmaat.
42
THE FOLLOWING REPORTS OF THE COMPENSATION COMMITTEE AND THE
AUDIT COMMITTEE SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR
TO BE INCORPORATED BY REFERENCE IN ANY PREVIOUS OR FUTURE
DOCUMENTS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
EXPRESSLY INCORPORATES SAID REPORTS BY REFERENCE IN ANY SUCH
DOCUMENT.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of the Companys Board of
Directors has reviewed and discussed the Compensation Discussion
and Analysis included in this Proxy Statement with management.
Based on such review and discussion, the Compensation Committee
has recommended to the Companys Board of Directors that
the Compensation Discussion and Analysis be included in this
Proxy Statement for filing with the SEC.
The Company has engaged Towers Watson to advise management and
the Committee with respect to the Companys compensation
programs and to perform various related studies and projects.
The aggregate fees billed by Towers Watson for consulting
services rendered to the Committee for 2009 in recommending the
amount or form of executive and director compensation were
approximately $318,000. The total amount of fees paid by the
Company to Towers Watson in 2009 for all other services,
excluding Committee services, was approximately $1,353,000.
These other services primarily related to actuarial services in
respect of the Companys defined benefit plans, general
employee compensation consulting services, benefit plan design
services and pension administration services. Approximately
$482,000 of the $1,353,000 in other services were paid directly
from the pension trusts of the Companys U.S. and U.K.
pension plans. The Committee recommended and approved the
provision of these additional services to the Company by Towers
Watson.
The foregoing report is submitted by the Compensation Committee
of the Companys Board of Directors.
Gerald L. Shaheen, Chairman
Herman Cain
Thomas W. LaSorda
George E. Minnich
Curtis E. Moll
AUDIT
COMMITTEE REPORT
To the Board of Directors:
The Audit Committee consists of the following members of the
Board of Directors: P. George Benson, Francisco R. Gros, Thomas
W. LaSorda, George E. Minnich (Chairman), Curtis E. Moll and
Hendrikus Visser. Each of the members is independent
as defined by the NYSE and SEC.
Management is responsible for the Companys internal
controls, financial reporting process and compliance with the
laws and regulations and ethical business standards. The
independent registered public accounting firm is responsible for
performing an independent audit of the Companys
consolidated financial statements and an audit of the
effectiveness of the Companys internal control over
financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States) and to
issue reports thereon. The Audit Committees responsibility
is to monitor and oversee these processes and to report its
findings to the Board of Directors. The Audit Committee members
are not professional accountants or auditors, and their
functions are not intended to duplicate or to certify the
activities of management and the independent registered public
accounting firm, nor can the Committee certify that the
independent registered public accounting firm is
independent under applicable rules. The Committee
serves a board-level oversight role, in which it provides
advice, counsel and direction to management and the auditors on
the basis of the information it receives, discussions with
management and the auditors and the experience of the
Committees members in business, financial and accounting
matters.
43
We have reviewed and discussed with management the
Companys audited consolidated financial statements as of
and for the year ended December 31, 2009 and
managements assessment of the effectiveness of the
Companys internal control over financial reporting and
KPMG LLPs audit of the Companys internal control
over financial reporting as of December 31, 2009.
We have discussed with KPMG LLP the matters required to be
discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, and
adopted by the Public Company Accounting Oversight Board (United
States).
We have received and reviewed the written disclosures and the
letter from KPMG LLP required by NYSE listing standards and the
applicable requirements of the Public Company Accounting
Oversight Board (United States) regarding the independent
accountants communications with the audit committee and
have discussed with the independent registered public accounting
firm the auditors independence.
We also have considered whether the provision of services
provided by KPMG LLP, not related to the audit of the
consolidated financial statements and internal control over
financial reporting referred to above or to the reviews of the
interim consolidated financial statements included in the
Companys
Forms 10-Q
for the quarters ended March 31, 2009, June 30, 2009,
and September 30, 2009, is compatible with maintaining KPMG
LLPs independence.
Based on the reviews and discussions referred to above, we
recommend to the Board of Directors that the financial
statements referred to above be included in the Companys
Annual Report on
Form 10-K
for the year ended December 31, 2009.
Audit
Fees
The aggregate fees billed by KPMG LLP for professional services
rendered for the audit of the Companys annual consolidated
financial statements for 2009 and 2008, the audit of the
Companys internal control over financial reporting for
2009 and 2008, subsidiary statutory audits and the reviews of
the financial statements included in the Companys SEC
filings on
Form 10-K,
Form 10-Q
and
Form 8-K
during such fiscal years were approximately $5,457,000 and
$5,961,000, respectively.
Audit-Related
Fees
The aggregate fees billed by KPMG LLP for professional services
rendered for fiscal years 2009 and 2008 for audit-related fees
were approximately $390,000 and $500,000, respectively. The
amounts for 2009 and 2008 primarily represent fees for the
review of internal controls established in connection with the
Companys implementation of an information system, as well
as the audits of the Companys employee benefit plans.
Tax
Fees
The aggregate fees billed by KPMG LLP for fiscal years 2009 and
2008 for professional services rendered for tax services
primarily related to customs service work and auditor-required
attestations of certain tax credit claims for the Companys
international operations was approximately $38,000 and $101,000,
respectively.
Financial
and Operational Information Systems Design and Implementation
Fees
KPMG LLP did not provide any information technology services
related to financial and operational information systems design
and implementation to the Company or its subsidiaries for fiscal
years 2009 or 2008.
All Other
Fees of KPMG LLP
There were no fees billed by KPMG LLP for professional services
rendered other than audit, audit-related and tax fees during
2009 or 2008. A representative of KPMG LLP will be present at
the Annual Meeting with the opportunity to make a statement and
will be available to respond to appropriate questions.
All of KPMG LLPs fees for services, whether for audit or
non-audit services, are pre-approved by the Chairman of the
Audit Committee or the Audit Committee. All services performed
by KPMG LLP for 2009 were
44
approved by the Chairman of the Audit Committee or the Audit
Committee. The Audit Committee has appointed KPMG LLP as the
Companys independent registered public accounting firm for
2010, subject to stockholder ratification. KPMG LLP has served
as the Companys independent registered public accounting
firm since 2002.
The foregoing report has been furnished by the Audit Committee
of the Companys Board of Directors.
George E. Minnich, Chairman
P. George Benson
Francisco R. Gros
Thomas W. LaSorda
Curtis E. Moll
Hendrikus Visser
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
At March 12, 2010, the Company had loans to Robert Ratliff,
who served as Chairman of the Board of Directors until his
retirement in August 2006 and is the step-father-in-law of
Randall G. Hoffman, who is the Companys Senior Vice
President Global Sales & Marketing and
Product Management, in the amount of $4.0 million bearing
interest at 5.46% related to an executive life insurance
program. The loan proceeds were used to purchase life insurance
policies owned by Mr. Ratliff. The Company maintains a
collateral assignment in the policies. In lieu of making the
interest payments under the notes, the loan interest is reported
as compensation. In addition, the Company has previously agreed
to reimburse Mr. Ratliff for his annual tax liability
associated with this additional compensation.
During 2009 and 2008, the Company received royalty payments
totaling approximately $436,000 and $462,000, respectively,
resulting from sales of equipment by MTD Products Inc. to the
Companys dealers in the ordinary course of business.
Mr. Moll, a director of the Company, is Chairman of the
Board and Chief Executive Officer of MTD Holdings, Inc., which
is the parent company of MTD Products.
During 2009, the Company paid approximately $3.4 million to
PPG Industries, Inc. for painting materials used in the
Companys manufacturing processes. Mr. Richenhagen,
who is the Companys Chairman, President and Chief
Executive Officer, is currently a member of the board of
directors and serves on the audit and technology/environment
committees of PPG Industries, Inc.
The Company has a written related party transaction policy
pursuant to which a majority of the independent directors of an
appropriate committee must approve transactions that exceed
$120,000 in amount in which any director, executive officer,
significant stockholder or certain other persons has or have a
material interest.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the
Companys directors and executive officers and persons who
own more than ten percent of a registered class of the
Companys equity securities to file with the SEC and the
NYSE initial reports of ownership and reports of changes in
ownership of the Companys Common Stock and other equity
securities. Such persons are required by the SEC to furnish the
Company with copies of all Section 16(a) forms that are
filed.
To the Companys knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, for the
fiscal year ended December 31, 2009, all Section 16(a)
filing requirements applicable to its directors, executive
officers and
greater-than-ten-percent
beneficial owners were properly filed.
45
ANNUAL
REPORT TO STOCKHOLDERS
The Companys Summary Annual Report to Stockholders and
Annual Report on
Form 10-K
for the 2009 fiscal year, including financial statements and
schedule thereto but excluding other exhibits, is being
furnished with this proxy statement to stockholders of record as
of March 12, 2010.
ANNUAL
REPORT ON
FORM 10-K
The Company will provide without charge a copy of its Annual
Report filed on
Form 10-K
for the 2009 fiscal year, including the financial statements and
schedule thereto, on the written request of the beneficial owner
of any shares of its Common Stock on March 12, 2010. The
written request should be directed to: Corporate Secretary, AGCO
Corporation, 4205 River Green Parkway, Duluth, Georgia 30096.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
A representative of KPMG LLP, the Companys independent
registered public accounting firm for 2009, is expected to
attend the Annual Meeting and will have the opportunity to make
a statement if he or she desires to do so. The representative
also will be available to respond to appropriate questions from
stockholders. The Audit Committee has appointed KPMG LLP as the
Companys independent registered public accounting firm for
2010, subject to stockholder ratification.
STOCKHOLDERS
PROPOSALS
Any stockholder of the Company who wishes to present a proposal
at the 2011 Annual Meeting of stockholders of the Company, and
who wishes to have such proposal included in the Companys
proxy statement and form of proxy for that meeting, must deliver
a copy of such proposal to the Company at its principal
executive offices at 4205 River Green Parkway, Duluth, Georgia
30096, Attention: Corporate Secretary, no later than
November 22, 2010; however, if next years Annual
Meeting of stockholders is held on a date more than 30 days
before or after the corresponding date of the 2010 Annual
Meeting, any stockholder who wishes to have a proposal included
in the Companys proxy statement for that meeting must
deliver a copy of the proposal to the Company at a reasonable
time before the proxy solicitation is made. The Company reserves
the right to decline to include in the Companys proxy
statement any stockholders proposal which does not comply
with the advance notice provisions of the Companys By-Laws
or the rules of the SEC for inclusion therein.
Any stockholder of the Company who wishes to present a proposal
at the 2011 Annual Meeting of stockholders of the Company, but
not have such proposal included in the Companys proxy
statement and form of proxy for that meeting, must deliver a
copy of such proposal to the Company at its principal executive
offices at 4205 River Green Parkway, Duluth, Georgia 30096,
Attention: Corporate Secretary no later than February 21,
2011 and otherwise in accordance with the advance notice
provisions of the Companys By-Laws or the persons
appointed as proxies may exercise their discretionary voting
authority if the proposal is considered at the meeting. The
advance notice provisions of the Companys By-Laws provide
that for a proposal to be properly brought before a meeting by a
stockholder, such stockholder must disclose certain information
and must have given the Company notice of such proposal in
written form meeting the requirements of the Companys
By-Laws no later than 60 days and no earlier than
90 days prior to the anniversary date of the immediately
preceding Annual Meeting of stockholders.
46
AGCO CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders, April 22, 2010
The undersigned hereby appoints Andrew H. Beck, Debra E. Kuper, Martin H. Richenhagen, and
each of them, proxies with full power of substitution, to represent and to vote as set forth herein
all the shares of Common Stock of AGCO Corporation held of record by the undersigned on March 12,
2010 at the Annual Meeting of Stockholders of AGCO Corporation to be held at the offices of the
Company, 4205 River Green Parkway, Duluth, Georgia 30096, at 9:00 a.m., local time, on Thursday,
April 22, 2010, and any adjournments thereof.
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Dated:
, 2010
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Signature |
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Signature, if held jointly |
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NOTE: Please sign above exactly as name appears on Stock |
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Certificate. If stock is held in the name of two or more persons, |
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all must sign. When signing as attorney, executor, |
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administrator, trustee or guardian, please give full title as such. |
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If a corporation, please sign in full corporate name by President |
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or other authorized officer. If a partnership, please sign in |
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partnership name by authorized person. |
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AGCO CORPORATION |
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PROXY CARD |
This Proxy Card when properly executed will be voted in the manner directed by the undersigned
stockholder. If no direction is made, this proxy will be voted FOR the election of all nominees
and FOR the ratification of the Companys independent registered public accounting firm.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES IN PROPOSAL NUMBER 1
AND FOR THE RATIFICATION OF KMPG LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR 2010 IN PROPOSAL NUMBER 2.
Nominees: (1) Francisco R. Gros
(2) Gerald B. Johanneson (3) George E. Minnich
(4) Curtis E. Moll
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FOR all nominees listed above
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WITHHOLD AUTHORITY to vote for all |
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(except as marked to the contrary)
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nominees listed above |
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write the nominees name
on the space provided below.
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RATIFICATION OF KPMG LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2010. |
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FOR ratification
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AGAINST ratification
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ABSTAIN
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In their discretion, the proxies are authorized to vote as described in the proxy statement
and, using their best judgment, upon such other business as may properly come before the
meeting. |