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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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Confidential, for Use of the Commission
[ ] Preliminary Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AGCO CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) 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 was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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.
(1) Amount Previously Paid:
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(4) Date Filed:
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[AGCO LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2001
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
Wednesday, April 25, 2001, at 9:00 a.m., local time, for the following purposes:
1. To elect four directors to serve for the ensuing three years or
until their successors have been duly elected and qualified;
2. To consider the AGCO Corporation 2001 Stock Option Plan, and
3. To transact any other business which may properly be brought before
the meeting.
The Board of Directors has fixed the close of business on March 12, 2001 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting. During the period from April 16, 2001 until the annual
meeting, a list of stockholders as of the close of business on March 12, 2001
will be available at the location of the meeting, for examination during normal
business hours by any stockholder.
WE URGE YOU TO MARK AND EXECUTE YOUR PROXY 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
ROBERT J. RATLIFF
Executive Chairman of the Board
Duluth, Georgia
April 4, 2001
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AGCO CORPORATION
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PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2001
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INFORMATION REGARDING PROXIES
This proxy solicitation is made by the Board of Directors (the "Board of
Directors" or the "Board") of AGCO Corporation (the "Company"), 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 on the proxy card to represent you 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 proxy. You may
indicate a vote for or against the proposal on the proxy card and your shares
will be voted accordingly. If you indicate a preference to abstain on the
proposal, no vote will be recorded. You may withhold your vote from any nominee
for director by writing his name in the appropriate space on the proxy card. You
may cancel your proxy before balloting begins by notifying the Corporate
Secretary in writing at 4205 River Green Parkway, Duluth, Georgia 30096. In
addition, any proxy signed and returned by you may be revoked at any time before
it is voted by signing and duly delivering a proxy bearing a later date or by
attendance at the meeting and voting in person. If you return a signed proxy
card that does not indicate your voting preferences, the persons named on the
proxy card will vote your shares in favor of all of the items set forth in the
attached notice.
The enclosed form of proxy is solicited by the Board of Directors of the
Company and the cost of solicitation of proxies will be borne by the Company. In
order to ensure that a quorum is represented by proxies at the meeting, proxy
solicitation may also be made personally or by telephone or telegram by officers
or employees of the Company, without added compensation. The Company will
reimburse brokers, custodians and nominees for their expenses in sending proxies
and proxy material to beneficial owners. The Company may retain an outside firm
to aid in the solicitation of proxies for fees which the Company expects would
not exceed $25,000.
This proxy statement and form of proxy are first being sent to stockholders
on or about April 4, 2001. The Company's 2000 Summary Annual Report to its
stockholders and its Annual Report on Form 10-K for the 2000 fiscal year are
also enclosed and should be read in conjunction with the matters set forth
herein. See "Annual Report to Stockholders."
VOTING SHARES
Only stockholders of record as of the close of business on March 12, 2001
will be entitled to notice of and to vote at the annual meeting to be held on
April 25, 2001 (the "Annual Meeting"). On March 12, 2001, the Company had
outstanding 59,591,828 shares of Common Stock, par value $.01 per share (the
"Common Stock"), each of which is entitled to one vote on each matter coming
before the meeting. No cumulative voting rights are authorized, and dissenters'
rights for stockholders are not applicable to the matters being proposed.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspector of elections appointed for the meeting who will also determine
whether a quorum is present for the transaction of business. The Company's
Bylaws 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. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining whether a quorum is
present. Shares held by nominees for beneficial owners will be counted for
purposes of determining whether a quorum is present if the nominee has the
discretion to vote on at least one of the
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matters presented even if the nominee may not exercise discretionary voting
power with respect to other matters and voting instructions have not been
received from the beneficial owner (a "broker non-vote"). With respect to any
matter (other than the election of directors) that may properly come before the
meeting for stockholder consideration, abstentions will be counted in
determining the minimum number of affirmative votes required for approval of any
matter presented for stockholder consideration 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 matters presented for stockholder consideration.
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
Currently, the Company's Board of Directors has fixed the number of
directors at eleven. The Board is divided into three classes of directors,
designated Class I, Class II and Class III, with each class as nearly equal in
number as possible to the other two classes. The three classes serve staggered
three-year terms. Stockholders annually elect directors of one of the three
classes to serve for three years or until their successors have been duly
elected and qualified. At the Annual Meeting, stockholders will elect four
directors to serve as Class III directors. The Governance Committee has
recommended, and the Board of Directors has nominated, the four individuals
named below to serve as Class III directors until the annual meeting in 2004 or
until their successors have been duly elected and qualified.
The following is a brief description of the business experience of each
nominee.
W. WAYNE BOOKER, age 66, has been a Director of the Company since October
2000. Mr. Booker currently serves as Vice Chairman of Ford Motor Company, a
position he has held since 1996. In addition, Mr. Booker has been a Vice
President of Ford since 1989. Mr. Booker currently serves on the boards of
several international councils. He is also the Chairman of the National Center
for Asia Pacific Economic Council.
GERALD B. JOHANNESON, age 60, has been a Director of the Company since
April 1995. Mr. Johanneson has been President and Chief Executive Officer of
Haworth, Inc. since June 1997. He served as President and Chief Operating
Officer of Haworth, Inc. from January 1994 to June 1997 and as Executive Vice
President and Chief Operating Officer from March 1988 to January 1994.
CURTIS E. MOLL, age 61, has been a Director of the Company since April
2000. Mr. Moll has been Chairman of the Board and Chief Executive Officer of MTD
Products, Inc., a global manufacturing corporation, since 1980. He joined MTD
Products as a project engineer in 1963. Mr. Moll is also Chairman of the Board
of Shiloh Industries and serves on the Boards of Cleveland Advanced
Manufacturing Program, Inc. and the Sherwin-Williams Company.
ROBERT J. RATLIFF, age 69, has been Executive Chairman of the Board of
Directors since January 1999 and Chairman of the Board of Directors since August
1993, and a Director since June 1990. Mr. Ratliff previously served as Chief
Executive Officer of the Company from January 1996 until November 1996 and from
August 1997 to February 1999 and President and Chief Executive Officer from June
1990 to January 1996. Mr. Ratliff is also a director of the National Association
of Manufacturers and the Equipment Manufacturers Institute. Mr. Ratliff is a
member of the Board of Councilors of the Carter Center.
Each of these nominees has indicated a willingness to serve on the Board of
Directors of the Company. If any of the nominees shall become unable to serve,
or for good cause will not serve, the persons named on the enclosed proxy card
may exercise their discretion to vote for any substitute nominee or nominees
proposed by the Board of Directors. The Company's Bylaws provide that
nominations from the floor of persons other than the nominees proposed by the
Board of Directors will not be accepted unless the stockholder has provided
certain information concerning proposed nominees to the Company in writing no
later than sixty days and no earlier than ninety days prior to the anniversary
date of the immediately preceding annual meeting of stockholders. Because the
Company has not received such notice as provided under its Bylaws, nominees
other than those proposed by the Board of Directors will not be accepted.
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The four nominees who receive the greatest number of votes cast for the
election of directors at the 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.
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 2002 and 2003, as
indicated.
Directors who are continuing in office as Class I Directors whose terms
expire at the annual meeting in 2002 are listed below:
WOLFGANG DEML, age 55, has been a Director of the Company since February
1999. Since July 1991, Mr. Deml has been President and Chief Executive Officer
of BayWa Corporation, a trading and services company located in Munich, Germany.
Mr. Deml is also currently Vice President of the German Raiffeisen Organization;
Executive Officer of the Austrian Raiffeisen Organization; a member of the
Supervisory Board of MAN Nutzfahrzeuge AG; a member of the Advisory Committee of
Allianz AG; a member of the Supervisory Board of VK Muhlen AG; a member of the
Supervisory Board of the Landwirtschaftliche Rentenbank Frankfurt; and a member
of the Supervisory Board of Raiffeisen Ware Austria.
ANTHONY D. LOEHNIS, age 65, has been a Director of the Company since July
1997. Mr. Loehnis has been a director of St. James's Place Capital plc since
July 1993 and its J. Rothschild International Marketing Limited subsidiary since
December 1995. Mr. Loehnis also serves as Non-Executive Director of Tokyo-
Mitsubishi International plc and Alpha Bank London Limited. Mr. Loehnis is
Non-Executive Chairman of Henderson Japanese Smaller Companies Trust plc and the
Knox D'Arcy Trust plc. Previously, from 1989 to 1992, Mr. Loehnis was a director
of S. G. Warburg Group plc, and, from 1981 to 1989, Mr. Loehnis was Executive
Director of the Bank of England in charge of international affairs.
DAVID E. MOMOT, age 63, has been a Director of the Company since August
2000. Over his 30 year career with General Electric, Mr. Momot served in various
manufacturing and general management positions. Most recently, from 1991 to
1997, Mr. Momot held various executive positions at General Electric including
Vice President of European Operations G.E. Lighting, President and Chief
Executive Officer of BG Automotive Motors, Inc. and, most recently, Vice
President and General Manager of Industrial Drive Motors and Generators. Mr.
Momot has served on the executive board of the Boy Scouts of America, on various
Chambers of Commerce at local and state levels and on several YMCA and church
boards.
JOHN M. SHUMEJDA, age 55, has been a Director of the Company since February
1999. He has been Chief Executive Officer and President for the Company since
February 1999. He served as President and Chief Operating Officer for the
Company from January 1998 to February 1999 and Executive Vice President,
Technology and Manufacturing from February 1997 to January 1998. Mr. Shumejda
was President, Corporate Operations and Technology from August 1996 to February
1997, Executive Vice President, Technology and Development from January 1996 to
August 1996 and Executive Vice President and Chief Operating Officer from
January 1993 to January 1996.
Directors who are continuing in office as Class II Directors whose terms
expire at the annual meeting in 2003 are listed below:
HENRY J. CLAYCAMP, age 69, has been a Director of the Company since June
1990. Mr. Claycamp has been President of MOSAIX Associates management consulting
since 1985. From 1973 to 1982, Mr. Claycamp was Vice President of Corporate
Planning and Vice President of Corporate Marketing for International Harvester
Company. Previously, Mr. Claycamp held professorial positions at Stanford
University, Purdue University and the Massachusetts Institute of Technology.
WOLFGANG SAUER, age 70, has been a Director of the Company since May 1997.
Dr. Sauer has been a principal of WS Consult -- Wolfgang Sauer & Associates S/C
Ltda., an international consulting firm based in
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Brazil since November 1990. Since 1992, Dr. Sauer has been Chairman of the Board
of SP Trans -- Sao Paulo Transporte and on the board or administrative council
of Iochpe-Maxion S.A., Coca-Cola Industries Ltda., Hannover Seguros S.A., Xerox
do Brasil S.A., Carborundum S.A., Atlas Copco do Brasil Ltda., Icatu Holding,
WTC-World Trade Center -- Sao Paulo and the Council of Brazil-German Chambers of
Industry and Commerce. From 1970 to March 1987, Dr. Sauer served as President
and Chief Executive Officer of Volkswagon for their operations in Argentina and
Brazil and served as President and Chief Executive Officer of the
Ford-Volkswagon joint-venture, Autolatina, in such countries from March 1987 to
November 1990. In February 1998, Dr. Sauer was designated Ambassador
Extraordinary and Plenipotentiary of the Sovereign Military Order of Malta for
Brazil.
HENK VISSER, age 56, has been a Director of the Company since April 2000.
Mr. Visser is Chief Financial Officer of NUON N.V. Mr. Visser has served on the
Board of major international corporations and institutions including the
Amsterdam Stock Exchange, Amsterdam Institute of Finance, International Farm
Management Association, Bever Holding, Sobel N.V., Agricultural University
Wageningen, Foundation Preferred Stocks KLM and on the economics faculty at Free
University.
BOARD OF DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD
During 2000, the Board of Directors held eight meetings. Each nonemployee
director receives a retainer fee of $30,000 per annum, $1,000 for each Board
meeting attended and $1,000 for each committee meeting attended. Committee
chairmen receive an annual retainer of $4,000 and an additional fee of $500 for
each committee meeting attended. The Company also pays Mr. Claycamp an annual
fee in lieu of the retainer fee of $50,000 as compensation for serving as
Chairman of the Executive Committee of the Board and an annual fee of $120,000
for serving as a marketing consultant to the Company. The Company pays Mr. Momot
an annual fee of $120,000 for serving as a manufacturing consultant to the
Company. In addition to the above fees, the Company provides each non-employee
director a grant of 5,000 shares under the Company's 1991 Stock Option Plan at
the time of each election to the Board with an exercise price equal to the stock
price at the date of grant. In addition, each non-employee director participates
in the Nonemployee Director Stock Incentive Plan (described below) and is
reimbursed for 50% of the fees paid by the director for personal estate planning
consulting by third parties. Directors who are employees of the Company are not
paid any fees or additional remuneration for service as members of the Board or
its committees.
NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
At the 1995 annual meeting, the stockholders approved the AGCO Corporation
Nonemployee Director Stock Incentive Plan (the "Director Plan"), effective
December 14, 1994, which was amended by the stockholders at the 1997 annual
meeting. Pursuant to the Director Plan, each nonemployee director is awarded the
right to receive shares of Common Stock which can be earned during the three
year performance period in effect for that participant. The Director Plan
requires stock appreciation to earn awards. The awarded shares are earned in
increments for each 15% increase in the average stock price (with the average
calculated over 20 consecutive trading days) over the base price (the fair
market value of the stock at the time the shares are awarded). The stock price
must increase 60% in a three year period for the full allocation to be earned.
When an increment of the award is earned, the shares are issued in the form of
restricted stock, which vests 12 months after the last day of the three year
performance period. In the event a director departs from the Board of Directors
for any reason, all earned awards vest. If the awarded shares are not fully
earned before the end of the three year performance period or before the
participant's departure from the Board of Directors for any reason, whichever
comes first, any unearned awards are forfeited. The ultimate value of the
restricted stock is determined by the stock price at the end of the vesting
period. When the restricted shares are earned, a cash payment designed to
satisfy a portion of the federal and state income tax obligations is paid by the
Company to each participant. The tax payment is provided to remove the necessity
for the nonemployee director to sell a significant portion of the stock earned
under the Director Plan to pay taxes.
As of March 12, 2001, there were 10,500 shares awarded but not earned under
the Director Plan and 8,500 shares that had been earned but not vested under the
Director Plan.
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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 Company's
Certificate of Incorporation or Bylaws. The Executive Committee held one
meeting in 2000 and is currently composed of Messrs. Claycamp (Chairman),
Johanneson, Moll, Ratliff, Sauer and Shumejda.
The Audit Committee's functions are to recommend for appointment by
the Board of Directors a firm of independent certified public accountants
to act as auditors for the Company and to meet with the auditors to review
the scope, preparation and results of the Company's audits, to review the
Company's internal accounting and financial controls and to consider other
matters relating to the financial reporting process and safeguarding of the
Company's assets. The Audit Committee held five meetings in 2000 and is
currently composed of Messrs. Booker, Loehnis, Moll (Chairman), Momot and
Visser. The report of the Audit Committee is set forth under the caption
"-- Audit Committee Report."
The Compensation Committee's functions are to review, approve,
recommend and report to the chief executive officer and the Board of
Directors matters regarding the compensation of the Company's chief
executive officer and other key executives, compensation levels or plans
affecting the compensation of the Company's other employees and
administration of the Company's Management Incentive Compensation Plan, the
1991 Stock Option Plan, the Long-Term Incentive Plan and the Director Plan.
The Compensation Committee held five meetings in 2000 and is currently
composed of Messrs. Booker, Deml, Johanneson (Chairman), Sauer and Visser.
The report of the Compensation Committee is set forth under the caption
"-- Compensation Committee Report on Executive Compensation."
The Governance Committee plays a central role in planning the size and
composition of the Board of Directors, developing criteria and implementing
the process of identifying, screening and nominating candidates for
election to the Board, evaluating Board performance and recommending action
to improve corporate governance. The Governance Committee expects to be
able to identify from its own resources the names of qualified nominees but
will accept recommendations of individuals to be considered as nominees
from stockholders. The Company's Bylaws provide that nominations from the
floor of persons other than the nominees proposed by the Board of Directors
will not be accepted unless the stockholder has provided certain
information concerning proposed nominees to the Company in writing no later
than sixty days and no earlier than ninety days prior to the anniversary
date of the immediately preceding annual meeting of stockholders. The
Governance Committee held two meetings in 2000 and is currently composed of
Messrs. Claycamp (Chairman), Deml, Loehnis and Moll.
The Succession Planning Committee's function is to ensure a continued
source of capable, experienced managers is present to support the Company's
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 held three meetings in 2000 and is currently composed of
Messrs. Claycamp, Johanneson, Momot, Ratliff, Sauer (Chairman) and
Shumejda.
During fiscal 2000, each director attended at least 75% of the aggregate of
the number of meetings of the Board and respective committees on which he served
while a member thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2000, Messrs. Booker, Deml, Johanneson, Sauer and Visser
served as members of the Compensation Committee. No member of the Compensation
Committee was an officer or employee of the Company or any of its subsidiaries
during fiscal 2000.
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PROPOSAL NUMBER 2
APPROVAL OF 2001 STOCK OPTION PLAN
The Board is submitting a proposal for approval by the stockholders to
approve our 2001 Stock Option Plan (the "2001 Option Plan"), which replaces the
Company's 1991 Stock Option Plan, as amended in 1998 (the "1991 Option Plan").
The 1991 Option Plan expires on September 17, 2001. In addition, the 1991 Option
Plan does not have sufficient shares to meet the Company's anticipated needs for
employee retention and recruiting.
If the Plan is approved by stockholders, we will not issue any additional
awards under the 1991 Stock Option Plan. However, unused shares under the 1991
Option Plan will carryover to the 2001 Stock Option Plan and be available for
the grant of awards under the 2001 Option Plan, as described below. Currently,
4,000,000 shares may be made subject to options granted under the 1991 Option
Plan. To date, the Board has granted 3,876,503 of the 4,000,000 options
currently available for grant under the 1991 Option Plan, leaving 123,497 shares
unused. The 2001 Option Plan would allow the Company to issue the remaining
unused shares under the 1991 Option Plan, plus an additional 2,500,000 shares.
Consequently, the 2001 Option Plan will enable the Company to grant an aggregate
of 2,623,497 options.
The Board believes that the 1991 Option Plan has been an important factor
in attracting, keeping and motivating key employees, and further believes that
this type of incentive should continue to be offered in the future. The 2001
Stock Option Plan provides for the grant to certain directors, key employees and
consultants of the Company and its subsidiaries of options to purchase shares of
Common Stock of the Company, which options may be qualified as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code or
nonqualified options. Only key employees may be granted incentive stock options
under the 2001 Option Plan. The Company believes that the 2001 Option Plan is an
important part of the Company's compensation policy for key employees who are
not executive officers. The 2001 Option Plan provides an effective method to
attract and retain qualified employees and provides a strong and direct link
between employee compensation and stockholder return. As a result, the Board
proposes and recommends approval of the 2001 Stock Option Plan.
The 2001 Stock Option Plan, which would allow stock options to be granted
beginning April 25, 2001 (the "Effective Date") through April 24, 2011, is
similar to the 1991 Option Plan. A summary of the 2001 Stock Option Plan appears
below. This summary is qualified in its entirety by reference to the text of the
2001 Stock Option Plan, which is included as Appendix A to this proxy statement.
The number of stock options that will be awarded to certain of the
Company's directors and key employees and consultants pursuant to the 2001
Option Plan is not currently determinable. The Company did not grant any stock
options pursuant to the 1991 Option Plan, the predecessor plan to the 2001
Option Plan, during the fiscal year ended December 31, 2000 to any of the
Company's Executive Chairman, the other four most highly compensated executive
officers of the Company or the other executive officers of the Company. In 2000,
however, 782,000 options were granted under the 1991 Stock Option Plan to
employees, including certain current officers who are not executive officers,
and 20,000 options were granted to directors who are not executive officers.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or by proxy at the meeting for this proposal will be
required to approve the amendment to the 2001 Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
TO APPROVE THE 2001 OPTION PLAN.
The material features of the 2001 Option Plan are outlined below.
ADMINISTRATION
The 2001 Option Plan will be administered by the Compensation Committee of
the Board of Directors, which will select the optionees and determine (i) the
amount of Common Stock subject to each option,
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(ii) the vesting schedule of the option, (iii) the exercise price (which, in the
case of the incentive stock options, cannot be less than 100% of the estimated
fair market value at the date of grant), and (iv) the duration of the option
(which, in the case of incentive stock options, cannot exceed 10 years from the
date of grant). The Compensation Committee will also have authority to construe
and amend the 2001 Option Plan and all options granted under it, to prescribe,
amend and rescind rules and regulations relating to the 2001 Option Plan, to
determine the terms and provisions of the options granted under the 2001 Option
Plan (which need not be identical) and to make all other determinations
necessary or advisable for administering the 2001 Option Plan.
TERMINATION AND AMENDMENT
Unless sooner terminated by the Board of Directors, the 2001 Option Plan
will terminate on April 24, 2011. The Board of Directors may amend the 2001
Option Plan without stockholder approval except to the extent that any such
amendment fails to comply with any applicable provision of the Internal Revenue
Code, ERISA or the rules of the NYSE or causes the 2001 Option Plan to fail to
be treated as qualified performance-based compensation under applicable Treasury
Regulations.
ELIGIBILITY AND EXERCISE PLAN
Options may be granted under the 2001 Option Plan only to certain of the
Company's directors and key employees and consultants of the Company or any of
its subsidiaries. As of March 12, 2001, 156 individuals held options granted
under the 1991 Option Plan, the predecessor plan to the 2001 Option Plan. In the
case of incentive stock options, if the aggregate fair market value (valued on
the date of the grant of the option) of the stock with respect to which
incentive stock options are exercisable for the first time by an optionee during
any calendar year exceeds $100,000, any options which otherwise qualify as
incentive stock options to the extent of the excess will be treated as
nonqualified options.
In granting an option, the Compensation Committee will designate whether
the option is an incentive stock option or a non-qualified stock option and fix
the number of shares of the Company's Common Stock that the grantee may purchase
on exercise of the option and the price at which the shares may be purchased. In
the case of any incentive stock option, such price may not be less than 100% of
the fair market value of the Company's Common Stock on the date of grant of the
option, except that in the event of any optionee who owns 10% or more of the
total combined voting power of all classes of stock of the Company (using the
attribution of stock ownership rules of Section 424(b) of the Internal Revenue
Code), the option price shall not be less than 110% of the fair market value of
the Company's Common Stock on the date of grant of the option and such option
must be exercised on or before the fifth anniversary date of the grant of the
option.
STOCK SUBJECT TO THE 2001 OPTION PLAN
As of March 12, 2001, 2,433,497 shares of Common Stock were reserved for
issuance upon exercise of options previously granted under the 1991 Option Plan
and 123,438 shares remained available for the grant of future options under such
plan. The 2001 Option Plan will allow the Company to issue the remaining unused
shares under the 1991 Option Plan, plus an additional 2,500,000 shares.
Consequently, if the 2001 Option Plan is adopted the number of shares authorized
for issuance under the 2001 Option Plan will be 2,623,438.
If any option granted under the 2001 Option Plan for any reason expires or
otherwise terminates without having been exercised in full, the stock not
purchased under such option again becomes available for issuance under the 2001
Option Plan. The stock subject to the 2001 Option Plan may be unissued shares of
Common Stock or shares of issued Common Stock held in the Company's treasury, or
both. No individual may receive options for more than 250,000 shares of Common
Stock over the life of the 2001 Option Plan.
TERMS OF OPTIONS
The Compensation Committee, in its discretion, may grant options under the
2001 Option Plan subject to such terms and conditions as the Compensation
Committee deems consistent with the terms of the 2001 Option Plan and not
inconsistent with applicable provisions of the Internal Revenue Code. The
Compensation
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Committee shall determine when each option shall expire (to the extent not fully
exercised), which date shall be no later than the tenth anniversary of the date
the option is granted, and on what schedule such options shall be exercised.
Upon exercise of an option, the holder must make payment in full of the option
price for the shares of the Company's Common Stock purchased in cash or in the
equivalent fair market value of shares of Common Stock. The 2001 Option Plan
prohibits the repricing of options granted to an employee upon cancellation of
outstanding options if the price of the new options would be lower than the
option price under existing options, unless a period in excess of six months has
elapsed between the date of cancellation of outstanding options and the granting
of new options.
All options are nontransferable other than by will or the laws of descent
and distribution, and incentive stock options are exercisable during the
lifetime of the optionee only while the optionee is in the employ of the Company
or within three months (one year in the case of disability) after termination of
employment. If an optionee dies, the option is exercisable not later than one
year from the date of death to the extent the optionee was entitled to exercise
the option on the date of death. The Company receives no consideration for the
grant of the options to optionees other than the services of the optionees to
the Company.
FEDERAL INCOME TAX CONSEQUENCES
Nonqualified Options. An individual receiving a nonqualified option under
the 2001 Option Plan does not recognize taxable income on the date of grant of
the option, assuming (as is usually the case with plans of this type) that the
option does not have a readily ascertainable fair market value at the time it is
granted. However, the individual must generally recognize ordinary income at the
time of exercise of the nonqualified option in the amount of the difference
between the option exercise price and the fair market value of the Common Stock
on the date of exercise. The amount of ordinary income recognized by an
individual is deductible by the Company in the year that the income is
recognized by the individual. Upon subsequent disposition, any further gain or
loss is taxable either as a short-term or long-term capital gain or loss,
depending upon the length of time that the shares of Common Stock are held.
Incentive Stock Options. An optionee who is granted an incentive stock
option under the 2001 Option Plan does not recognize taxable income either on
the date of grant or on the date of its timely exercise. However, the excess of
the fair market value of the Common Stock received upon the exercise of the
incentive stock option over the option exercise price is includable in the
optionee's alternative minimum taxable income and may be subject to the
alternative minimum tax ("AMT"). For AMT purposes only, the basis of the Common
Stock acquired by the exercise of an incentive stock option is increased by the
amount of such excess.
Upon the disposition of the Common Stock acquired upon exercise of an
incentive stock option, long-term capital gain or loss will be recognized in an
amount equal to the difference between the sales price and the option exercise
price (except that for AMT purposes, the gain or loss would be the difference
between the sales price and the optionee's basis increased as described in the
preceding paragraph), provided that the optionee has not disposed of the Common
Stock within two years after the date of grant or within one year from the date
of exercise. If the optionee disposes of the Common Stock without satisfying
both holding period requirements (a "Disqualifying Disposition"), the optionee
will generally recognize ordinary income at the time of such Disqualifying
Disposition to the extent of the lesser of (i) the difference between the
exercise price and the fair market value of the Common Stock on the date the
incentive stock option is exercised or (ii) the difference between the exercise
price and the amount realized on such Disqualifying Disposition. Any remaining
gain or any net loss is treated as a short-term or long-term capital gain or
loss, depending upon the length of time that the Common Stock is held. Unlike
the case in which a nonqualified option is exercised, the Company is not
entitled to a tax deduction upon either the timely exercise of an incentive
stock option or upon disposition of the Common Stock acquired pursuant to such
exercise, except to the extent that the optionee recognizes ordinary income in a
Disqualifying Disposition.
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OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
action at the meeting other than the election of directors. If any other
business should properly come before the meeting, the persons named in the
accompanying form of proxy intend to vote thereon in accordance with their best
judgment.
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth certain information as of March 12, 2001
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 Company's Common
Stock.
AMOUNT AND
NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS(1)
------------------- ------------- ----------
Dimensional Fund Advisors(2)................................ 3,326,620 5.6%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Massachusetts Financial Services(3)......................... 5,481,175 9.2
500 Boylston Street
Boston, MA 02116
Mellon Financial Corporation(4)............................. 4,973,099 8.3
One Mellon Center
Pittsburgh, Pennsylvania 15258
Forstmann-Leff Associates, LLC(5)........................... 6,352,271 10.7
590 Madison Avenue
New York, New York 10022
Same Deutz-Fahr S.p.A(6).................................... 5,949,000 10.0
Vidale Francesco Cassani n. 14
24047 Treviglio (Bg), Italy
---------------
(1) Based on 59,591,828 shares of Common Stock outstanding on March 12, 2001.
(2) Based upon Schedule 13G filed with the Securities and Exchange Commission on
February 2, 2001. Dimensional Fund Advisors Inc. ("Dimensional") is an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940 and furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate
accounts. These investment companies, trusts and accounts are the "Funds."
All securities reported in the Schedule 13G filed by Dimensional with the
Securities and Exchange Commission on February 2, 2001 are owned by the
Funds. Dimensional disclaims beneficial ownership of such securities.
(3) Based upon Schedule 13G filed with the Securities and Exchange Commission on
February 9, 2001.
(4) Based upon Schedule 13G filed with the Securities and Exchange Commission on
January 17, 2001.
(5) Based on the Amendment No. 2 to Schedule 13G filed on February 14, 2001.
Includes shares beneficially owned by FLA Asset Management, LLC, FLA
Advisers LLC, and Forstmann-Leff International, LLC.
(6) Based upon Schedule 13G filed with the Securities and Exchange Commission as
of February 14, 2001.
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The following table sets forth certain information as of March 12, 2001
with respect to the beneficial ownership of the Company's Common Stock by the
Company's directors, the Chairman and Chief Executive Officer of the Company
during 2000 and the other four most highly compensated executive officers of the
Company during such period and all executive officers and directors as a group.
Unless otherwise indicated in the footnotes, each such individual has sole
voting and investment power with respect to the shares set forth in the table.
AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP PERCENT OF
NAME OF BENEFICIAL OWNER (1)(2)(3) CLASS(4)
------------------------ ---------- ----------
Robert J. Ratliff(5)........................................ 781,952 1.3%
W. Wayne Booker............................................. -- *
Henry J. Claycamp........................................... 23,548 *
Wolfgang Deml............................................... 1,500 *
Gerald B. Johanneson........................................ 10,000 *
Anthony D. Loehnis.......................................... 4,500 *
Curtis E. Moll.............................................. 1,000 *
David E. Momot.............................................. -- *
Wolfgang Sauer.............................................. 2,500 *
John M. Shumejda............................................ 362,093 *
Henk Visser................................................. 1,000 *
Norman L. Boyd.............................................. 56,500 *
Aaron D. Jones.............................................. 52,200 *
Edward R. Swingle........................................... 186,728 *
All executive officers and directors as a group (18
persons).................................................. 1,573,176 2.6%
---------------
* Less than one percent.
(1) Includes shares which may be purchased upon exercise of options which are
exercisable as of March 12, 2001 or become exercisable within 60 days
thereafter, for the following individuals: Mr. Ratliff -- 9,000; Mr.
Claycamp -- 1,000; Mr. Johanneson -- 5,000; Mr. Moll -- 1,000; Mr.
Visser -- 1,000; Dr. Sauer -- 1,000; Mr. Boyd -- 5,200; Mr. Jones -- 7,200;
all executive officers and directors as a group -- 62,055.
(2) Includes the following numbers of unvested restricted shares of the
Company's Common Stock earned under the Long-Term Incentive Plan by the
following individuals: Mr. Shumejda -- 42,167; Mr. Boyd -- 14,667; Mr.
Jones -- 18,333; Mr. Swingle -- 14,667; all executive officers and directors
as a group -- 124,400.
(3) Includes the following numbers of restricted shares of the Company's Common
Stock earned under the Director Plan by the following individuals: Mr.
Claycamp -- 2,000; Mr. Deml -- 1,500; Mr. Johanneson -- 2,000; Mr.
Loehnis -- 1,500; Dr. Sauer -- 1,500; all executive officers and directors
as a group -- 8,500.
(4) Any securities not outstanding which are subject to options which are
exercisable as of March 12, 2001 or become exercisable within 60 days
thereafter are deemed outstanding for the purpose of computing the
percentage of outstanding securities of the class owned by any person
holding such securities but are not deemed outstanding for the purpose of
computing the percentage of the class owned by any other person. Based on
59,591,828 shares of Common Stock outstanding on March 12, 2001.
(5) Includes 2,742 shares of Common Stock owned by Mr. Ratliff's wife, 200,000
shares of Common Stock beneficially owned by Mr. Ratliff as trustee of the
Robert J. Ratliff Charitable Remainder Unitrust and 568,360 shares of Common
Stock owned by a family limited partnership of which Mr. Ratliff controls
the general partner. Mr. Ratliff disclaims beneficial ownership of these
shares.
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EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 2000, 1999
and 1998, the cash and noncash compensation paid to or earned by Robert J.
Ratliff, who served as Chairman and Chief Executive Officer until February 1999
and as Executive Chairman thereafter, and the four other most highly compensated
executive officers of the Company during 1999 (collectively, the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------------- ------------
OTHER ANNUAL RESTRICTED ALL OTHER
NAME AND ($)(2) STOCK AWARDS COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS($)(1) COMPENSATION ($)(3) ($)(4)
------------------ ---- ---------- ----------- ------------ ------------ ------------
Robert J. Ratliff -- 2000 $1,000,000 $ -- $ 25,200 $ -- $ 4,800
Executive Chairman of 1999 1,000,000 -- 12,500 -- 19,243
the Board 1998 1,000,000 -- -- -- 255,957
John M. Shumejda -- 2000 607,200 524,924 883,261 -- 32,156
President and Chief 1999 486,036 -- 942,440 -- 94,070
Executive Officer 1998 395,842 88,273 848,484 -- 159,393
Edward R. Swingle -- 2000 290,872 251,459 385,524 -- 43,119
Senior Vice President, 1999 258,154 -- 456,131 -- 38,031
Sales and Marketing, North 1998 213,786 42,223 438,643 -- 42,563
and South America
Norman L. Boyd -- 2000 233,731 202,060 151,904 -- 29,091
Senior Vice President, 1999 212,483 -- 78,042 -- 8,879
Corporate Development 1998 188,917 30,227 82,336 -- 6,618
Aaron D. Jones(5) -- 2000 224,664 194,222 189,025 -- 1,925
Former Senior Vice President, 1999 200,241 -- 94,104 -- 1,524
Manufacturing Operations 1998 191,112 42,618 29,967 946
Worldwide
---------------
(1) For Messrs. Shumejda, Swingle, Boyd and Jones, bonus includes payments of
bonuses earned under the Company's Management Incentive Compensation Plan
which are made in the subsequent fiscal year. Under the terms of Mr.
Ratliff's employment contract, effective August 15, 1995, Mr. Ratliff no
longer participates in the Company's Management Incentive Compensation Plan.
(2) Other Annual Compensation includes cash payments made pursuant to the terms
of the LTIP designed to satisfy a portion of the federal and state income
tax obligations arising from the vesting of restricted stock awards ("LTIP
Cash Payments"). LTIP Cash Payments for the past three years were as
follows: Mr. Shumejda -- $873,480 in 2000, $935,609 in 1999 and $793,584 in
1998; Mr. Swingle -- $382,579 in 2000, $453,186 in 1999 and $403,786 in
1998; Mr. Boyd -- $150,329 in 2000, $76,467 in 1999 and $27,067 in 1998; Mr.
Jones -- $189,025 in 2000, $94,104 in 1999 and $29,967 in 1998. Other Annual
Compensation also includes 3% of the U.S. resident executive's salary that
exceeds the maximum compensation limits under the Company's 401(k) savings
plan beginning July 30, 1999. Other Annual Compensation for Mr. Shumejda in
1998 also includes the benefit for personal use of an airplane and
automobile leased by the Company in the amount of $54,900. Other Annual
Compensation for Mr. Swingle also includes relocation expenses and a related
tax equalization payment in the amount of $30,471 for 1998. Other Annual
Compensation for Mr. Boyd in 1998 includes cost of living allowances related
to an overseas assignment in the amount of $53,694.
(3) Restricted Stock Awards represents restricted shares of Common Stock of the
Company pursuant to the Company's Long-term Incentive Plan ("LTIP"). At
March 12, 2001, the number and value of the aggregate shares of unvested
restricted Common Stock beneficially held by each of the participants named
above pursuant to the LTIP were as follows: Mr. Shumejda, 42,167 shares with
a value of
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$425,043; Mr. Swingle, 14,667 shares with a value of $147,843; Mr. Boyd,
14,667 shares with a value of $147,843; and Mr. Jones, 18,333 shares with a
value of $184,797. Awards earned under the LTIP by Mr. Ratliff have all
vested.
(4) All Other Compensation for 2000 includes the following: (i) the value of the
benefit to the executive officer for life insurance policies funded by the
Company as follows: Mr. Shumejda -- $27,356; Mr. Swingle -- $38,319 and Mr.
Boyd -- $24,291, and (ii) contributions to the Company's 401(k) Savings Plan
in the amount of $4,800 for Messrs. Ratliff, Shumejda, Swingle and Boyd.
(5) Mr. Jones resigned as an officer and employee of the Company effective April
21, 2001. Mr. Jones' employment agreement with the Company provides that he
will continue to receive his base salary for a period of two years after the
termination of employment. Mr. Jones will also be entitled to benefits
accrued under the Massey Ferguson UK Executive Pension Trust. The other
terms of Mr. Jones' resignation are currently being negotiated by the
Company.
STOCK OPTIONS
The Company did not grant any stock options pursuant to the Company's 1991
Stock Option Plan during the fiscal year ended December 31, 2000 to any of the
Named Executive Officers.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options
exercised during the last fiscal year and the unexercised options held as of the
end of the fiscal year under the Company's Option Plan for the Named Executive
Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000 AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2000(#) DECEMBER 31, 2000($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Robert J. Ratliff.... $ -- $ -- 9,000 -- $86,625 $ --
John M. Shumejda..... -- -- -- -- -- --
Edward R. Swingle.... -- -- -- -- -- --
Norman L. Boyd....... -- -- 5,200 -- -- --
Aaron D. Jones....... -- -- 7,200 -- -- --
---------------
(1) Based on the market price of the Company's Common Stock on December 29, 2000
($12.125), less the exercise price of "in-the-money" options.
EMPLOYMENT CONTRACTS
The Company has employment contracts with Messrs. Ratliff, Shumejda,
Swingle and Boyd. The employment contracts provide for base salaries at the
following rates per annum: Mr. Ratliff -- $1,000,000; Mr. Shumejda -- $607,000;
Mr. Swingle -- $300,000; and Mr. Boyd -- $252,890. Mr. Ratliff's contract, dated
August 15, 1995, is for an eight year term, and Mr. Shumejda's contract, dated
January 1, 1996, is for a ten year term. See "Compensation of the Chairman of
the Board and Chief Executive Officer" under the heading "Compensation Committee
Report on Executive Compensation" for additional details on Mr. Ratliff's and
Mr. Shumejda's contracts. Mr. Swingle's and Mr. Boyd's employment contract
continue in effect until terminated in accordance with the terms of the
contract. Mr. Jones resigned as an officer and employee effective April 21,
2001. Under the terms of his employment contract, Mr. Jones will continue to
receive his base salary for a period of two years from the date his employment
terminated. The other terms of Mr. Jones' resignation are currently being
negotiated by the Company.
With the exception of Mr. Ratliff's contract, in addition to the specified
base salary, the employment contracts provide that each officer shall be
entitled to participate in or receive benefits under the Company's
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Management Incentive Compensation Plan (the "Management Incentive Compensation
Plan"). See "Compensation Committee Report on Executive Compensation." 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. The employment contracts discussed above
provide for the payment of certain benefits in the event of a change of control
(as defined therein) of the Company.
THE FOLLOWING REPORTS OF THE AUDIT COMMITTEE AND THE COMPENSATION COMMITTEE
AND THE PERFORMANCE GRAPH THAT APPEARS IMMEDIATELY AFTER SUCH REPORT 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 SPECIFICALLY INCORPORATES
SAID REPORTS OR PERFORMANCE GRAPH BY REFERENCE IN ANY SUCH DOCUMENT.
AUDIT COMMITTEE REPORT
To the Board of Directors:
The Audit Committee consists of the following members of the Board of
Directors: Curtis E. Moll (Chairman), W. Wayne Booker, Anthony D. Loehnis, David
E. Momot, Henk Visser. Each of the members is "independent" as defined by the
New York Stock Exchange.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2000.
We have discussed with Arthur Andersen LLP the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, and issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
Arthur Andersen LLP required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, and issued by the Independence
Standards Board, and have discussed with the auditors the auditors'
independence.
We have also considered whether the provision of services provided by
Arthur Andersen LLP, not related to the audit of the financial statements
referred to above and to the reviews of the interim financial statements
included in the Company's Forms 10-Q for the quarters ended March 31, 2000, June
30, 2000, and September 30, 2000, is compatible with maintaining Arthur Andersen
LLP's 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 Company's Annual Report on Form 10-K for the year ended December 31,
2000.
Audit Fees
The aggregate fees billed by Arthur Andersen LLP for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year 2000 and the reviews of the financial statements included in the
Company's Form 10-Q during such fiscal year were $1,310,131.
Financial Information Systems Design and Implementation Fees
There were no fees billed by Arthur Andersen LLP for professional services
rendered for financial information systems design and implementation for fiscal
year 2000.
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All Other Fees of Arthur Andersen LLP
The aggregate fees billed by Arthur Andersen LLP for professional services
rendered other than audit fees and financial information systems design and
implementation fees above were $1,212,267. These fees were primarily for tax
advisory services and internal audit services. The Audit Committee considers the
provision of these services to be compatible with maintaining the independence
of Arthur Andersen LLP.
Arthur Andersen LLP has audited the accounts of the Company and its
subsidiaries since 1990 and will continue in that capacity during 2001. A
representative of Arthur Andersen LLP will be present at the Annual Meeting with
the opportunity to make a statement and will be available to respond to
appropriate questions.
A copy of the written charter of the Audit Committee of AGCO Corporation is
attached to this Proxy Statement as Appendix A.
The foregoing report has been furnished by the Audit Committee of the
Company's Board of Directors.
Curtis E. Moll, Chairman
W. Wayne Booker
Anthony D. Loehnis
David E. Momot
Henk Visser
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed entirely
of non-employee directors. The Compensation Committee is responsible for
developing and making recommendations to the Board with respect to the Company's
compensation plans and policies for the Company's executive officers as well as
the Board of Directors. In carrying out this responsibility, the Compensation
Committee approves the design of all compensation plans applicable to executive
officers and directors, reviews and approves performance goals, establishes
award opportunities, approves incentive award payouts, oversees the ongoing
operation of the various plans and makes recommendations to the Board regarding
certain of these matters. In addition, the Compensation Committee, pursuant to
authority delegated by the Board, determines on an annual basis the base
salaries to be paid to the Executive Chairman of the Board, the Chief Executive
Officer and each of the other executive officers as well as directors of the
Company. The Compensation Committee also, in conjunction with the Board, reviews
compensation policies applicable to executive officers as well as directors and
considers the relationship of corporate performance to that compensation. The
Compensation Committee has available to it an outside compensation consultant
and access to independent compensation data.
EXECUTIVE OFFICER COMPENSATION POLICIES
The objectives of the Company's executive compensation program are to:
- Support the achievement of desired Company performance.
- Provide compensation that will attract and retain superior talent and
reward performance.
- Align the executive officers' interests with the success of the Company
by placing a portion of compensation at risk with payout being dependent
upon corporate performance and appreciation in the price of the Company's
Common Stock.
Effective January 1, 1994, Section 162(m) of the Internal Revenue Code was
enacted to disallow a corporate deduction for compensation in excess of
$1,000,000 per year per individual paid to the Company's Chief Executive Officer
and the other four most highly compensated officers, unless certain requirements
are met. To the extent compensation is "performance-based," as defined by the
Internal Revenue Code, it is excluded from compensation subject to the
$1,000,000 cap on tax deductibility. The Committee's policy is to design and
administer the Company's executive officer compensation program to comply with
Section 162(m) to the extent such compliance is practicable and in the best
interests of the Company and its stockholders in order to minimize any loss of
tax deductibility.
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The executive compensation program provides an overall level of
compensation opportunity that is competitive with companies of comparable size
and complexity. The Compensation Committee will use its discretion to set
executive compensation at a level that, in its judgment, is warranted by
external, internal or individual circumstances.
The Compensation Committee endorses the position that stock ownership by
management and stock-based performance compensation arrangements are beneficial
in aligning management's and stockholders' interests in the enhancement of
stockholder value. The Chairman of the Board, the Chief Executive Officer and
the other Named Executive Officers during 2000 are relatively substantial
stockholders in the Company and are thus motivated to act on behalf of all
stockholders to optimize overall Company performance.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's Executive Officer Compensation Program is comprised of base
salary, incentive compensation in the form of an annual bonus plan, the
Company's Long-Term Incentive Plan, the Supplemental Executive Retirement Plan
and various benefits, including medical and savings plans which are generally
available to employees of the Company.
Base Salary
Base salaries for the Company's key executive officers are established
under employment contracts. The salaries are reviewed annually and are approved
by the Compensation Committee. In determining base salaries, the Compensation
Committee takes into consideration individual experience and performance as well
as other circumstances particular to the Company. Base salary levels for the
Company's executive officers are comparable to other companies of the same size
and complexity. The Compensation Committee has periodically used information
provided by independent consultants in evaluating base salary levels.
Incentive Compensation
The compensation policy of the Company, which was developed by the
Compensation Committee, is that a substantial portion of the annual compensation
of each officer relates to and must be contingent upon the performance of the
Company, as well as the individual contribution of each officer. As a result,
much of an executive officer's compensation is subject directly to annual bonus
compensation measured against established corporate and individual performance
goals. Under the Management Incentive Compensation Plan, bonuses are paid based
on the executive officer's performance and the performance of the entire
Company. The purpose of the Management Incentive Compensation Plan is to provide
a direct financial incentive in the form of an annual cash bonus for the
achievement of corporate and personal objectives. Incentive compensation bonus
opportunities are expressed as a percentage of the executive officer's base
salary. The corporate objectives are set at the beginning of each year and must
comprise at least 50% of the individual's objectives, with Messrs. Shumejda's,
Swingle's, Boyd's and Jones' objectives based entirely upon corporate
performance. For the year ended December 31, 2000, the corporate objectives were
based on targets for net sales, pre-tax income, operating cash flow, and return
on invested capital. Effective August 15, 1995, pursuant to the terms of Mr.
Ratliff's amended employment contract, Mr. Ratliff's participation in the
Management Incentive Compensation Plan was discontinued.
The incentive compensation under the Management Incentive Compensation Plan
is variable and the Compensation Committee believes it is closely tied to
corporate and individual performance in a manner that encourages continuing
focus on maintaining profitability and building stockholder value.
In addition, special incentive awards can be made based on extraordinary
and unusual achievement as determined by the Compensation Committee. Such awards
are subject to approval by the Board of Directors.
Long-Term Incentive Plan
The LTIP is established as the primary long-term incentive vehicle for
senior management. While other managers and key employees are eligible to
receive stock option grants, participants in the LTIP are not
15
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eligible to receive stock options under the stock option program. The plan is
designed to encourage officers and key employees to seek ways to improve
efficiencies, spend capital wisely, reduce debt and generate cash, all of which
should combine to cause stock price appreciation.
The LTIP provides opportunities for participants to earn shares of the
Company's Common Stock if performance goals (measured solely by the increase in
the price of the Common Stock) are met. The LTIP operates over a five-year
performance period. Under the LTIP, each participant receives a contingent
allocation of shares which can be earned during the specific five-year
performance period. The size of the participant's total share allocation is
based on the Compensation Committee's evaluation of the participant's ability to
contribute to the Company's overall performance and is established to provide a
long-term incentive opportunity which is competitive with the practices of a
cross-section of U.S. industrial companies. If the share allocation is not fully
earned during the performance period, any remaining opportunity is forfeited.
The share allocation is earned in increments for each 20% increase in average
stock price (with the average calculated over 20 consecutive trading days) over
the base price established by the Compensation Committee. Accordingly, the stock
price must double during a five-year period for the full allocation to be
earned.
For all restricted stock awards prior to 2000, earned shares were issued to
the participant in the form of restricted stock which generally carried a
five-year vesting period with one-third of each earned award vesting at the end
of the third, fourth and fifth year after each award is earned. In 2000, the
LTIP was amended to replace the vesting schedule with a non-transferability
period for all future grants. Accordingly, for restricted stock awards in 2000
and all future awards, earned shares are subject to a non-transferability period
which expires over a five-year period with the transfer restrictions lapsing in
one-third increments at the end of the third, fourth, and fifth year after each
award is earned. During the non-transferability period, participants are
restricted from selling, assigning, transferring, pledging or otherwise
disposing of any earned shares, but earned shares are not subject to forfeiture.
In the event a participant terminates employment with the Company, the
non-transferability period is extended by two years. When the earned shares have
vested and are no longer subject to forfeiture, the Company is obligated to pay
a cash bonus equal to 40% of the value of the shares on the date the shares are
earned in order to satisfy a portion of the estimated income tax liability to be
incurred by the participant. In the event of a change of control (as defined in
the LTIP), all restrictions on earned shares lapse immediately.
Stock Option Program
The Company maintains the AGCO Corporation 1991 Stock Option Plan as a
long-term incentive for key employees and consultants who do not participate in
the LTIP. As set forth in this proxy statement, the Company is proposing to
replace the 1991 Option Plan with the 2001 Option Plan, subject to shareholder
approval of the 2001 Option Plan. See "Proposal Number 2 -- Approval of 2001
Stock Option Plan." The objectives of these plans are similar to those of the
LTIP in aligning key employee and stockholder long-term interests by creating a
strong and direct link between an employee's compensation and stockholder return
and enabling key employees to develop and maintain a significant, long-term
stock ownership position in the Company's Common Stock.
The qualified 1991 Option Plan authorizes, and the 2001 Option Plan will
authorize, the Compensation Committee to award stock options to key employees
based on outstanding performance and achievement. Options granted under the plan
have an exercise price equal to 100% of the fair market value of the Company's
Common Stock on the date of grant and expire not later than ten years from the
date of grant. Each recipient of such options is entitled to immediately
exercise up to 20% of the options issued to such person and an additional 20% of
such options vest in each subsequent year over each of the next four years.
Awards are made at levels believed to be competitive with companies of
comparable size and complexity.
Supplemental Executive Retirement Plan
The Supplemental Executive Retirement Plan ("SERP") provides Company
executives with retirement income for a period of ten years based on a
percentage of their final base salary, reduced by the executive's social
security benefits and 401(k) employer matching contributions account. The
benefit paid to the
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executive is equal to 3% of the final base salary times credited years of
service, with a maximum benefit of 60% of the final base salary. Benefits under
the SERP vest at age 65 or, at the discretion of the Board of Directors, at age
62 reduced by a factor to recognize early commencement of the benefit payments.
Other Benefits
The Company provides to executive officers medical benefits and retiree
benefits in the form of contributions to a company sponsored 401(k) savings plan
equal to 3% of base salary up to a base salary of $160,000 which is the maximum
amount allowable under the IRS regulations. These benefits are comparable to
those generally available to company employees. The Company also funds life
insurance policies on behalf of its executive officers. The amount funded under
the policies and the amount of insurance provided to the executive is
commensurate with the executive's salary and level of responsibility. In
addition, the Company enables its directors to participate in the Company's
medical plans. The Company also allows limited personal use of an airplane
leased by the Company to certain executive officers.
Compensation of the Executive Chairman of the Board and Chief Executive
Officer
Mr. Ratliff served as Chairman of the Board and Chief Executive Officer
until February 1999 and continues to serve as Executive Chairman under an
employment contract dated August 15, 1995, which was approved by the
Compensation and Executive Committees of the Board of Directors. Under the
employment contract, Mr. Ratliff's compensation is principally comprised of a
base salary and restricted stock awards which are tied to stock performance. Mr.
Ratliff's total compensation was evaluated in comparison to a peer group of
companies of similar size, complexity and performance.
The employment contract provides Mr. Ratliff with a base salary of
$1,000,000 per annum. The base salary reflects the discontinuance of Mr.
Ratliff's participation in the Company's Management Incentive Compensation Plan
and recognition of the Company's past performance and growth. Under Mr.
Ratliff's leadership, the Company has grown substantially and established itself
as one of the largest manufacturers and distributors of agricultural equipment
in the world.
In February 2000, Mr. Ratliff was granted 200,000 contingent shares which
could be earned under the LTIP during a five-year performance period. For the
grant to be fully earned by Mr. Ratliff, the stock price must reach an average
of $23.75 for a 20-day period. Mr. Ratliff has not earned any shares under the
February 2000 grant. Under the terms of Mr. Ratliff's employment contract, all
shares earned by Mr. Ratliff pursuant to the LTIP will carry no restrictions.
Under the terms of Mr. Shumejda's employment contract dated January 1,
1996, Mr. Shumejda's compensation is principally comprised of a base salary of
$607,000 per annum, participation in the Management Incentive Compensation Plan
and restricted stock awards pursuant to the LTIP. Mr. Shumejda's total
compensation is based on a comparison to a peer group of companies with similar
size, complexity and performance. In February 2000, Mr. Shumejda was granted
250,000 contingent shares which could be earned under the LTIP during a
five-year performance period. For the shares under the contingent grant to be
earned, the stock price must reach an average of $23.75 for a 20-day period. Mr.
Shumejda has not earned any shares under the February grant. All shares earned
by Mr. Shumejda under the LTIP grant will carry a five-year non-transferability
period.
The Compensation Committee believes that the executive officers
compensation program is suited to retaining and rewarding executives who
contribute to the success of the Company in achieving its business objectives
and increasing stockholder value. The Compensation Committee further believes
that the program strikes an appropriate balance among the interests and needs of
the Company, its stockholders and its executives.
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The foregoing report has been furnished by the Compensation Committee of
the Company's Board of Directors.
Gerald B. Johanneson, Chairman
W. Wayne Booker
Wolfgang Deml
Wolfgang Sauer
Henk Visser
PERFORMANCE GRAPH
The graph shown below is a line graph presentation of the Company's
cumulative stockholder returns on an indexed basis as compared to the S&P
Mid-Cap 400 Index and the S&P Machinery -- Diversified Index.
COMPARISON OF STOCKHOLDER RETURN*
AMONG AGCO CORPORATION, S&P MID-CAP 400 INDEX AND
S&P MACHINERY -- DIVERSIFIED INDEX
AGCO CORPORATION S&P MID-CAP 400 S&P MACHINERY-DIVERSIFIED
---------------- --------------- -------------------------
12/95 100 100 100
3/96 94 106 115
6/96 109 109 115
9/96 100 112 123
12/96 112 119 125
3/97 109 117 125
6/97 141 135 159
9/97 125 156 165
12/97 115 158 159
3/98 117 175 175
6/98 81 171 156
9/98 26 146 110
12/98 31 188 121
3/99 26 176 124
6/99 45 200 156
9/99 51 184 142
12/99 53 215 140
3/00 45 242 122
6/00 49 234 113
9/00 47 263 109
12/00 48 253 144
---------------
* Assumes $100 invested in the Company's Common Stock as of December 31, 1995.
Assumes the investment of the same amount as of December 31, 1995 for the S&P
Mid-Cap 400 Index and the S&P Machinery -- Diversified Index. Total return
includes reinvestment of dividends. Returns for the Company are not
necessarily indicative of future performance.
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EXECUTIVE OFFICERS
The following table sets forth information as of March 21, 2001 with
respect to each person who is an executive officer of the Company.
NAME AGE POSITIONS
---- --- ---------
Robert J. Ratliff.......................... 69 Executive Chairman of the Board
John M. Shumejda........................... 55 President and Chief Executive Officer
Edward R. Swingle.......................... 59 Senior Vice President of Sales and
Marketing, North and South America
Adri Verhagen.............................. 59 Senior Vice President of Sales and
Marketing, Europe/Africa/Middle East and
East Asia/Pacific
Norman L. Boyd............................. 57 Senior Vice President of Corporate
Development
Stephen D. Lupton.......................... 56 Senior Vice President and General Counsel
Donald R. Millard.......................... 53 Senior Vice President and Chief Financial
Officer
Dexter E. Schaible......................... 51 Senior Vice President of Engineering and
Development Worldwide
For a description of Messrs. Ratliff's and Shumejda's business experience,
see "Proposal Number 1 -- Election of Directors."
Edward R. Swingle has been Senior Vice President of Sales and Marketing,
North and South America for the Company since June 1999. Mr. Swingle was Senior
Vice President of Worldwide Marketing from September 1998 to May 1999, Vice
President of Special Projects from July 1998 to September 1998, Vice President
of Parts, North America from July 1996 to July 1998, Vice President of Parts,
Americas from February 1995 to July 1996 and Vice President of Marketing from
May 1993 to February 1995.
Adri Verhagen has been Senior Vice President of Sales and Marketing,
Europe/Africa/Middle East and East Asia/Pacific for the Company since June 1999.
Mr. Verhagen was Vice President of Sales, Europe/Africa/Middle East from
September 1998 to May 1999, Director/General Manager, East Asia/Pacific from
October 1995 to September 1998 and Managing Director Massey Ferguson of
Australia Ltd. from July 1979 to October 1995.
Norman L. Boyd has been Senior Vice President of Corporate Development for
the Company since October 1998. Mr. Boyd was Vice President of
Europe/Africa/Middle East Distribution from February 1997 to September 1998,
Vice President of Marketing, Americas from February 1995 to February 1997 and
Manager of Dealer Operations from January 1993 to February 1995.
Stephen D. Lupton has been Senior Vice President and General Counsel for
the Company since June 1999. Mr. Lupton was Vice President of Legal Services,
International from October 1995 to May 1999, and Director of Legal Services,
International from June 1994 to October 1995. Mr. Lupton was Director of Legal
Services of Massey Ferguson from February 1990 to June 1994.
Donald R. Millard has been Senior Vice President and Chief Financial
Officer since October 2000. Mr. Millard was previously President, Chief
Executive Officer and a director of Matria Healthcare, Inc. from October 1997
until October 2000. From October 1997 to October 1999 Mr. Millard also service
as Chief Financial Officer of Matria Healthcare. Mr. Millard also service as
Senior Vice President -- Finance, Chief Financial Officer and Treasurer of
Matria Healthcare from March 1996 until October 1997. Mr. Millard is a director
of First Union Bank, Atlanta, Georgia, Coast Dental Services, Inc. and American
HomePatient, Inc.
Dexter E. Schaible has been Senior Vice President of Engineering and
Product Development, Worldwide for the Company since October 1998. Mr. Schaible
was Vice President of Worldwide Product Development for the Company from
February 1997 to October 1998, Vice President of Product Development from
October 1995 to February 1997 and Director of Product Development from September
1993 to October 1995.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At March 12, 2001, the Company had loans outstanding in excess of $60,000
bearing interest at 6% to the following executive officers: Robert J.
Ratliff -- $90,000; John M. Shumejda -- $75,000; and Norman L. Boyd -- $153,325.
The proceeds of the loans were used primarily to exercise stock options.
The Company has an agreement to source certain engines for use in the
Company's Brazilian production from Iochpe-Maxion, S.A. Dr. Sauer, a director
the Company, is also a director of Iochpe-Maxion S.A.
During 2000, the Company had net sales of $126.4 million to BayWa
Corporation in the ordinary course of business. Mr. Deml, a director of the
Company, is President and Chief Executive Officer of BayWa Corporation.
In 2000, the Company entered into supply agreements with SAME Deutz-Fahr
Group S.p.A. under which SAME Deutz-Fahr supplies to the Company certain orchard
and vineyard tractors and the Company supplies to SAME Deutz-Fahr combines in
the European market. At December 31, 2000, SAME Deutz-Fahr owned approximately
10% of the Company's common stock, but had no involvement in the Company's
management.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission and the New York Stock Exchange, Inc. initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Such persons are required by the Commission to
furnish the Company with copies of all Section 16(a) forms that are filed.
To the Company's 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, 2000, all Section
16(a) filing requirements applicable to its directors, executive officers and
greater than ten-percent beneficial owners were properly filed.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Summary Annual Report to Stockholders and Annual Report on
Form 10-K for the 2000 fiscal year, including financial statements and schedules
thereto but excluding other exhibits, is being furnished with this proxy
material to stockholders of record as of March 12, 2001.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE 2000 FISCAL
YEAR, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, ON THE WRITTEN
REQUEST OF THE BENEFICIAL OWNER OF ANY SHARES OF ITS COMMON STOCK ON MARCH 12,
2001, PROVIDED THAT SUCH REQUEST SETS FORTH A GOOD FAITH REPRESENTATION THAT, AS
OF SUCH DATE, THE PERSON MAKING THE REQUEST WAS A BENEFICIAL OWNER OF COMMON
STOCK OF THE COMPANY. THE WRITTEN REQUEST SHOULD BE DIRECTED TO: CORPORATE
SECRETARY, AGCO CORPORATION, 4205 RIVER GREEN PARKWAY, DULUTH, GEORGIA 30096.
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INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, a firm of independent public accountants, has been
appointed the Company's independent public accountants for the year 2001. The
appointment of auditors is approved annually by the Board of Directors. The
decision of the Board is based on the recommendation of the Audit Committee.
A representative of Arthur Andersen LLP 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 will also be available to respond to appropriate
questions from stockholders.
STOCKHOLDERS' PROPOSALS
Any stockholder of the Company who wishes to present a proposal at the 2002
annual meeting of stockholders of the Company, and who wishes to have such
proposal included in the Company's 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 December 5, 2001; however, if next year's
annual meeting of stockholders is held on a date more than 30 days before or
after the corresponding date of the 2001 Annual Meeting, any stockholder who
wishes to have a proposal included in the Company's 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 Company's proxy statement any stockholder's proposal which
does not comply with the rules of the Securities and Exchange Commission for
inclusion therein.
Any stockholder of the Company who wishes to present a proposal at the 2002
annual meeting of stockholders of the Company, but not have such proposal
included in the Company's 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 18, 2002 and in accordance with the advance
notice provisions of the Company's Bylaws 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 Company's Bylaws provide
that for a proposal to be properly brought before a meeting by a stockholder,
such stockholder must have given the Company notice of such proposal in written
form meeting the requirements of the Company's Bylaws no later than sixty days
and no earlier than ninety days prior to the anniversary date of the immediately
preceding annual meeting of stockholders.
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APPENDIX A
AGCO CORPORATION
AUDIT COMMITTEE CHARTER OF THE BOARD OF DIRECTORS
SECTION I
PURPOSE AND RESPONSIBILITIES
The primary function of the Audit Committee (the "Committee") is to assist
the Board of Directors in fulfilling its oversight responsibilities by reviewing
the financial reports and other financial information provided by the Company to
the shareholders or any governmental body, the Company's systems of internal
controls established by management and the Board, and the Company's auditing,
accounting and financial reporting processes generally.
The Committee's primary duties and responsibilities are to serve as an
independent and objective party to monitor the Company's financial reporting
process and internal control system; to review and appraise the audit efforts of
the Company's independent accountants and internal auditors; and to provide an
open avenue of communication among the independent accountants, financial and
senior management, the internal auditors and the Board. The Committee has the
authority to conduct any investigation appropriate to fulfilling its
responsibilities, and it has direct access to the independent accountants as
well as anyone in the organization. The Committee has the ability to retain, at
the Company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties. In carrying out its
responsibilities, the Committee believes its policies and procedures should
remain flexible, in order to react appropriately to changing conditions and to
ensure to the Board and shareholders that the accounting and reporting practices
of the Company are in accordance with all requirements.
The Company's independent accountants are ultimately responsible to the
Board of Directors and the Committee. The Committee has full authority and
responsibility to select, evaluate, and, if necessary, replace the independent
accountants.
SECTION II
COMPOSITION
The Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent non-executive directors, free
from any relationship that would interfere with the exercise of his or her
independent judgment as a member of the Committee, and otherwise shall meet the
requirements of the New York Stock Exchange. All members of the Committee shall
have a basic understanding of finance and accounting practices, and at least one
member of the Committee shall, to the extent possible, have accounting or
related financial management expertise.
SECTION III
MEETINGS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Committee should meet at least annually
with management, the internal auditors and the independent accountants in
separate executive sessions to discuss any matters that the Committee or each of
these groups believes should be discussed privately. In addition, the Committee
or at least its Chair should meet with management and the independent
accountants quarterly to review the Company's financial statements and
significant findings basal upon the auditors limited review.
A-1
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SECTION IV
DUTIES AND RESPONSIBILITIES
To fulfill its duties and responsibilities the Committee shall:
Review of Documents and Reports
1. Review and reassess the adequacy of this Charter, at least annually or
as conditions dictate.
2. Review the Company's annual financial statements prior to filing or
submission to the shareholders or any governmental body, including any report,
opinion or review rendered by the independent accountants.
3. Review the regular internal reports to management prepared by the
internal auditors and management's response.
4. Review with financial management and the independent accountants the
Company's quarterly financial results prior to filing of the SEC Form 10-Q.
Discuss any significant changes to the Company's accounting principles and any
items required to be communicated by the independent accountants. The Chair of
the Committee may represent the entire Committee for purposes of this review.
5. Prepare a report for Inclusion in the annual Proxy Statement stating
whether the Committee has reviewed and discussed the financial statements with
management and the independent auditors, and whether the Committee recommended
to the Board that the audited financials be included in the Form 10-K
6. File this Charter as an appendix to the Proxy Statement at least once
every three years.
Independent Accountants
7. Recommend to the Board the selection of the independent accountants,
considering independence and effectiveness, and approve the fees and other
compensation to be paid to them.
8. On an annual basis, the Committee should review and discuss with such
accountants all significant relationships they have with the Company to
determine their independence. In connection with this responsibility, the
Committee shall receive on an annual basis, a formal written statement from the
independent accountants regarding relationships and services which may affect
their objectivity and independence.
9. Review the performance of the independent accountants and approve the
discharge of such accountants when circumstances warrant.
10. Review the independent accountants audit plan and scope for the current
year audit.
11. After the completion of the annual audit examination, review with
management and the independent accountants the following:
- The Company's annual financial statements and related footnotes.
- The independent accountants audit of and report on the financial
statements.
- Discuss certain matters required to be communicated to Audit Committees.
- Comments or recommendations of the independent accountants and
management's response.
Internal Audit and Legal Compliance
12. Review the internal audit plan, scope and budget on an annual basis.
13. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
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14. On an annual basis, review with the Company's legal counsel, any legal
matters that would have a significant impact on the company's financial
statements, the Company's compliance with applicable laws and regulations and
inquiries received from regulators or governmental agencies.
Financial Reporting Processes
15. Discuss with the independent accountants their judgments about the
quality and appropriateness of the accounting principles used in the Company's
financial reporting, including the consistency of accounting policies and the
clarity and completeness of the financial statements and related disclosures.
16. Discuss with management, the independent accountants and the internal
auditors any significant risks or exposures affecting the Company, and assess
the steps management has taken to minimize such risks and exposures.
17. Consider and approve (where appropriate) major changes to the Company's
auditing and accounting principles and practices as suggested by the independent
accountants, management or the internal auditors.
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APPENDIX B
FORM OF
AGCO CORPORATION
2001 STOCK OPTION PLAN
28
AGCO CORPORATION
2001 STOCK OPTION PLAN
SECTION I
PURPOSES
AGCO Corporation (the "Company") desires to afford certain directors, key
employees and consultants of the Company and its subsidiaries who are
responsible for the continued growth of the Company an opportunity to acquire a
proprietary interest in the Company, and thus to create in such persons interest
in and a greater concern for the welfare of the Company.
The stock options offered pursuant to this 2001 Stock Option Plan (the
"Plan") are a matter of separate inducement and are not in lieu of any salary or
other compensation for services.
The Company, by means of the Plan, seeks to retain the services of persons
now holding key positions and to secure the services of persons capable of
filling such positions.
The options granted under the Plan may be designated as either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or options that do not
meet the requirements for Incentive Options ("Non-Qualified Options") but the
Company makes no warranty as to the qualification of any option as an Incentive
Option. Only key employees may be granted Incentive Options under the Plan.
SECTION II
AMOUNT OF STOCK SUBJECT TO THE PLAN
The total number of shares of common stock of the Company which may be
purchased pursuant to the exercise of options granted under the Plan shall not
exceed, in the aggregate, 2,623,438 shares of the authorized common stock, $0.01
par value, per share, of the Company (the "Shares").
Shares which may be acquired under the Plan may be either authorized but
unissued Shares or Shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company. If and to the extent that options
granted under the Plan expire or terminate without having been exercised, new
options may be granted with respect to the Shares covered by such expired or
terminated options, provided that the grant and the terms of such new options
shall in all respects comply with the provisions of the Plan.
Except as provided in Article XX, the Company may, from time to time during
the period beginning April 25, 2001 (the "Effective Date") and ending April 24,
2011 (the "Termination Date") grant options to certain directors, key employees
and consultants under the terms hereinafter set forth.
No individual shall be granted options to purchase in the aggregate more
than 250,000 shares.
SECTION III
ADMINISTRATION
The Board of Directors of the Company (the "Board of Directors") shall
designate from among its members an option committee (the "Committee") to
administer the Plan. The Committee shall consist of no fewer than three (3)
members of the Board of Directors, each of whom shall be a "nonemployee
director" within the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and an "outside director" within the meaning of Section 162(m)(4)(C)(i)
of the Code. A majority of the members of the Committee shall constitute a
quorum, and the act of a majority of the members of the Committee shall be the
act of the Committee. Any member of the Committee may be removed at any time,
either with or without cause, by resolution adopted by a majority of the Board
of Directors, and any vacancy on the Committee may at any time be filled by
resolution adopted by a majority of the Board of Directors.
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Any or all powers and functions of the Committee may at any time and from
time to time be exercised by the Board of Directors; provided, however, that,
with respect to the participation in the Plan by persons who are members of the
Board of Directors, such powers and functions of the Committee may be exercised
by the Board of Directors only if, at the time of such exercise, all of the
members of the Board of Directors acting in the particular matter are
"nonemployee directors" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Exchange Act and "outside directors" within
the meaning of Section 162(m)(4)(C)(i) of the Code.
Subject to the express provisions of the Plan, the Board of Directors or
the Committee, as the case may be, shall have authority, in its discretion, to
determine the persons to whom options shall be granted, the time when such
options shall be granted, the number of Shares which shall be subject to each
option, the purchase price of each Share which shall be subject to each option,
the period(s) during which such options shall be exercisable (whether in whole
or in part) and the other terms and provisions thereof. In determining the
employees to whom options shall be granted and the number of Shares for which
options shall be granted to each person, the Board of Directors or the
Committee, as the case may be, shall consider the length of service, the amount
of earnings, and the responsibilities and duties of such person.
Subject to the express provisions of the Plan, the Board of Directors or
the Committee, as the case may be, also shall have authority to construe the
Plan and options granted thereunder, to amend the Plan and options granted
thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the respective options (which
need not be identical) and to make all other determinations necessary or
advisable for administering the Plan; provided, however, that neither the Board
of Directors nor the Committee shall issue any new option in exchange for the
cancellation of an existing option if such new option would have an exercise
price lower than the exercise price of the cancelled option. The Board of
Directors or the Committee, as the case may be, also shall have the authority to
require, in its discretion, as a condition of the granting of any such option,
that the optionee agree (i) not to sell or otherwise dispose of Shares acquired
pursuant to the option for a period of six (6) months following the date of
acquisition of such Shares and (ii) that in the event of termination of service
of the optionee with the Company or any subsidiary of the Company, other than as
a result of dismissal without cause, such optionee will not, for a period to be
fixed at the time of the grant of the option, enter into any other employment or
participate directly or indirectly in any other business or enterprise which is
competitive with the business of the Company or any subsidiary of the Company,
or enter into any employment in which such optionee will be called upon to
utilize special knowledge obtained through service with the Company or any
subsidiary of the Company.
The determination of the Board of Directors or the Committee, as the case
may be, on matters referred to in this Article III shall be conclusive.
The Board of Directors or the Committee, as the case may be, may employ
such legal counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion received from any such
counsel or consultant and any computation received from any such consultant or
agent. Expenses incurred by the Board of Directors or the Committee in the
engagement of such counsel, consultant or agent shall be paid by the Company. No
member or former member of the Committee or of the Board of Directors shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted hereunder.
SECTION IV
ELIGIBILITY
Options may be granted only to directors, key employees and consultants of
the Company and its subsidiaries who are not members of the Committee.
An Incentive Option shall not be granted to any person who, at the time the
option is granted, owns stock of the Company or any subsidiary or parent of the
Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any subsidiary or parent of
the
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Company unless (i) the option price is at least one hundred ten percent (110%)
of the fair market value per share (as defined in Article VI) of the stock
subject to the option and (ii) the option is not exercisable after the fifth
anniversary of the date of grant of the option. In determining stock ownership
of an employee, the rules of Section 424(d) of the Code shall be applied, and
the Board of Directors or the Committee, as the case may be, may rely on
representations of fact made to it by the employee and believed by it to be
true.
SECTION V
MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS
If the aggregate fair market value of stock with respect to which Incentive
Options are exercisable for the first time by an employee during any calendar
year (under all stock option plans of the Company and any parent or any
subsidiary of the Company) exceeds $100,000, any options which otherwise qualify
as Incentive Options, to the extent of the excess, will be treated as
Non-Qualified Options.
SECTION VI
OPTION PRICE AND PAYMENT
The price per Share under any option granted hereunder shall be such amount
as the Board of Directors or the Committee, as the case may be, shall determine
but, in the case of an Incentive Option, such price shall not be less than one
hundred percent (100%) of the fair market value of the Shares subject to such
option, as determined in good faith by the Board of Directors or the Committee,
as the case may be, at the date the option is granted.
If the Shares are listed on a national securities exchange in the United
States on the date any option is granted, the fair market value per Share shall
be deemed to be the average of the high and low quotations at which such Shares
are sold on such national securities exchange in the United States on the date
next preceding the date upon which the option is granted, but if the Shares are
not traded on such date, or such national securities exchange is not open for
business on such date, the fair market value per Share shall be determined as of
the closest preceding date on which such exchange shall have been open for
business and the Shares were traded. If the Shares are listed on more than one
national securities exchange in the United States on the date any such option is
granted, the Committee shall determine which national securities exchange shall
be used for the purpose of determining the fair market value per Share. If the
Shares are not listed on a national securities exchange but are reported on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the fair market value per share shall be deemed to be the average of
the high bid and low asked prices on the date next preceding the date upon which
the option is granted as reported by NASDAQ.
For purposes of this Plan, the determination by the Board of Directors or
the Committee, as the case may be, of the fair market value of a Share shall be
conclusive.
Upon the exercise of an option granted hereunder, the Company shall cause
the purchased Shares to be issued only when it shall have received the full
purchase price for the Shares in cash; provided, however, that in lieu of cash,
the holder of an option may, if and to the extent the terms of such option so
provide and to the extent permitted by applicable law, exercise an option in
whole or in part, by delivering to the Company shares of common stock of the
Company (in proper form for transfer and accompanied by all requisite stock
transfer tax stamps or cash in lieu thereof) owned by such holder having a fair
market value equal to the cash exercise price applicable to that portion of the
option being exercised by the delivery of such Shares. The fair market value of
the stock so delivered shall be determined as of the date immediately preceding
the date on which the option is exercised, or as may be required in order to
comply with or to conform to the requirements of any applicable laws or
regulations.
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SECTION VII
USE OF PROCEEDS
The cash proceeds of the sale of Shares subject to the options granted
hereunder are to be added to the general funds of the Company and used for its
general corporate purposes as the Board of Directors shall determine.
SECTION VIII
LOANS, LOAN GUARANTEES AND INSTALLMENT PAYMENTS
In order to assist an optionee (including an optionee who is an officer or
director of the Company or any subsidiary of the Company) in the acquisition of
shares of Common Stock pursuant to an option granted under the Plan, the Board
of Directors or the Committee, as the case may be, may authorize, at either the
time of the grant of an option or the time of the acquisition of Common Stock
pursuant to the option, (i) the extension of a loan to the optionee by the
Company, (ii) the payment by the optionee of the purchase price, if any, for the
Common Stock in installments, or (iii) the guarantee by the Company or a
subsidiary of the Company of a loan obtained by the optionee from a third party.
The terms of any loans, guarantees or installment payments, including the
interest rate and terms of repayment, will be subject to the discretion of the
Board of Directors or the Committee, as the case may be. Loans, installment
payments and guarantees may be granted without security, the maximum credit
available being the purchase price, if any, of the Common Stock acquired plus
the maximum federal and state income and employment tax liability which may be
incurred in connection with the acquisition. In no event, however, may the
amount of any loan exceed the amounts allowable to the loan to such individual
for the purposes stated hereunder as provided by any regulation of the United
States Treasury or other State or Federal statute.
SECTION IX
TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Unless the Board of Directors or the Committee, as the case may be, shall
determine otherwise (in which event the instrument evidencing the option granted
hereunder shall so specify), any option granted hereunder shall be exercisable
during a period of not more than ten (10) years from the date of grant of such
option.
The Board of Directors or the Committee, as the case may be, shall have the
right to accelerate, in whole or in part, from time to time, conditionally or
unconditionally, rights to exercise any option granted hereunder.
To the extent that an option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part.
Options granted to an employee may not be repriced whereby outstanding
options are canceled and the exercises price of the new option is lower than the
price of the canceled option, unless a period in excess of six months has
elapsed between the date of cancellation of outstanding options and the granting
of new options.
SECTION X
EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the optionee as to all
or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company and the stock
transfer agent for the Company at the principal business office of the Company,
specifying the number of Shares to be purchased and specifying a business day
not more than fifteen (15) days from the date such notice is given, for the
payment of the purchase price against delivery of the Shares being purchased.
Subject to the terms of Articles XV, XVI, XVII and XVIII, the Company shall
cause certificates for the Shares so purchased to be delivered to the optionee,
against payment of the full purchase price, on the date specified in the notice
of exercise.
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SECTION XI
NONTRANSFERABILITY OF OPTIONS
An option granted hereunder shall not be transferable, whether by operation
of law or otherwise, other than by will or the laws of descent and distribution,
and any option granted hereunder shall be exercisable, during the lifetime of
the holder, only by such holder.
SECTION XII
TERMINATION OF EMPLOYMENT
Upon termination of employment of any employee with the Company or any
subsidiary of the Company any option previously granted to such employee, unless
otherwise specified by the Board of Directors or the Committee, as the case may
be, shall, to the extent not theretofore exercised, terminate and become null
and void, provided that:
(a) if the employee shall die while in the employ of the Company or
any subsidiary of the Company or during either the three (3) month or one
(1) year period, whichever is applicable, specified in clause (b) below and
at a time when such employee was entitled to exercise an option as herein
provided, the legal representative of such employee, or such person who
acquired such option by bequest or inheritance or by reason of the death of
the employee, may, not later than one (1) year from the date of death,
exercise such option, to the extent not theretofore exercised, in respect
of any or all of such number of Shares as specified by the Board of
Directors or the Committee, as the case may be, in such option grant; and
(b) if the employment of any employee to whom such option shall have
been granted shall terminate by reason of the employee's retirement (at
such age or upon such conditions as shall be specified by the Board of
Directors or the Committee, as the case may be), disability (as described
in Section 22(e)(3) of the Code) or dismissal by the employer other than
for cause (as defined below), and while such employee is entitled to
exercise such option as herein provided, such employee shall have the right
to exercise such option so granted, to the extent not theretofore
exercised, in respect of any or all of such number of Shares as specified
by the Board of Directors or the Committee, as the case may be, in such
option at any time up to and including (i) three (3) months after the date
of such termination of employment in the case of termination by reason of
retirement or dismissal other than for cause and (ii) one (1) year after
the date of termination of employment in the case of termination by reason
of disability.
In no event, however, shall any person be entitled to exercise any option
after the expiration of the period of exercisability of such option as specified
therein.
If an employee voluntarily terminates his or her employment, or is
discharged for cause, any option granted hereunder shall, unless otherwise
specified by the Board of Directors or the Committee, as the case may be, in the
option, forthwith terminate with respect to any unexercised portion thereof.
Notwithstanding any other provision of this Article XII, if the employment
of any employee with the Company or any subsidiary of the Company is terminated,
whether voluntarily or involuntarily, within a one-year period following a
change in the ownership or effective control of the Company (within the meaning
of Section 280G(b)(2)(A)(i) of the Code) and while such employee is entitled to
exercise an option as herein provided, other than a termination of such
employment by the Company or any subsidiary of the Company for cause, such
employee shall have the right to exercise all or any portion of such option at
any time up to and including three (3) months after the date of such termination
of employment, at which time such option shall cease to be exercisable.
If an option granted hereunder shall be exercised by the legal
representative of a deceased employee or former employee, or by a person who
acquired an option granted hereunder by bequest or inheritance or by reason of
the death of any employee or former employee, written notice of such exercise
shall be accompanied
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by a certified copy of letters testamentary or equivalent proof of the right of
such legal representative or other person to exercise such option.
For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to an employee who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
any subsidiary of the Company, which agreement or plan contains a definition of
"for cause or cause" (or words of like import) for purposes of termination of
employment thereunder by the Company or such subsidiary of the Company, "for
cause" or "cause" as defined in the most recent of such agreements or plans, or
(ii) in all other cases, as determined by the Committee or the Board of
Directors, as the case may be, in its sole discretion, (a) the willful
commission by an employee of a criminal or other act that causes or will
probably cause substantial economic damage to the Company or a substantial
injury to the business reputation of the Company; (b) the commission by an
employee of an act of fraud in the performance of such employee's duties on
behalf of the Company or any subsidiary of the Company; or (c) the continuing
willful failure of an employee to perform the duties of such employee to the
Company or any subsidiary of the Company (other than such failure resulting from
the employee's incapacity due to physical or mental illness) after written
notice thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to the
employee by the Board of Directors or the Committee, as the case may be. For
purposes of the Plan, no act, or failure to act, on the employee's part shall be
considered "willful" unless done or omitted to be done by the employee not in
good faith and without reasonable belief that the employee's action or omission
was in the best interest of the Company or a subsidiary of the Company.
For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422(a) of the Code. If an individual is on military, sick leave or
other bona fide leave of absence such individual shall be considered an
"employee" for purposes of the exercise of an option and shall be entitled to
exercise such option during such leave if the period of such leave does not
exceed 90 days, or, if longer, so long as the individual's right to reemployment
with the Company is guaranteed either by statute or by contract. If the period
of leave exceeds ninety (90) days, the employment relationship shall be deemed
to have terminated on the ninety-first (91st) day of such leave, unless the
individual's right to re-employment is guaranteed by statute or contract.
A termination of employment shall not be deemed to occur by reason of (i)
the transfer of an employee from employment by the Company to employment by a
subsidiary of the Company or (ii) the transfer of an employee from employment by
a subsidiary of the Company to employment by the Company or by another
subsidiary of the Company.
SECTION XIII
ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares, or
other like change in capital structure of the Company, an adjustment shall be
made to each outstanding option such that each such option shall thereafter be
exercisable for such securities, cash and/or other property as would have been
received in respect of the Shares subject to such option had such option been
exercised in full immediately prior to such change, and such an adjustment shall
be made successively each time any such change shall occur. The term "Shares"
shall after any such change refer to the securities, cash and/or property then
receivable upon exercise of an option. In addition, in the event of any such
change, the Board of Directors or the Committee, as the case may be, shall make
any further adjustment as may be appropriate to the maximum number of Shares
subject to the Plan, the maximum number of Shares for which options may be
granted to any one employee, and the number of Shares and price per Share
subject to outstanding options as shall be equitable to prevent dilution or
enlargement of rights under such options, and the determination of the Board of
Directors or the Committee, as the case may be, as to these matters shall be
conclusive. Notwithstanding the foregoing, (i) each such adjustment with respect
to an Incentive Option shall comply with the rules of Section 424(a) of the
Code, and (ii) in no event shall any adjustment be made which
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would render any Incentive Option granted hereunder other than an incentive
stock option for purposes of Section 422 of the Code without the consent of the
grantee.
SECTION XIV
RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or any subsidiary
of the Company to continue the employment of any holder of an option and it
shall not impose any obligation on the part of any holder of an option to remain
in the employ of the Company or of any subsidiary thereof.
SECTION XV
PURCHASE FOR INVESTMENT
Except as hereafter provided, the holder of an option granted hereunder
shall, upon any exercise thereof, execute and deliver to the Company a written
statement, in form satisfactory to the Company, in which such holder represents
and warrants that such holder is purchasing or acquiring the Shares acquired
thereunder for such holder's own account, for investment only and not with a
view to the resale or distribution thereof, and agrees that any subsequent offer
for sale or sale or distribution of any of such Shares shall be made only
pursuant to either (a) a Registration Statement on an appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), which Registration
Statement has become effective and is current with regard to the Shares being
offered or sold, or (b) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption the holder shall, prior to
any offer for sale or sale of such Shares, obtain a prior favorable written
opinion, in form and substance satisfactory to the Company, from counsel for or
approved by the Company, as to the applicability of such exemption thereto. The
foregoing restriction shall not apply to (i) issuances by the Company so long as
the Shares being issued are registered under the Securities Act and a prospectus
in respect thereof is current or (ii) reofferings of Shares by affiliates of the
Company (as defined in Rule 405 or any successor rule or regulation promulgated
under the Securities Act) if the Shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
SECTION XVI
ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
Upon any exercise of an option which may be granted hereunder and payment
of the purchase price, a certificate or certificates for the Shares as to which
the option has been exercised shall be issued by the Company in the name of the
person exercising the option and shall be delivered to or upon the order of such
person or persons.
The Company may endorse such legend or legends upon the certificates for
Shares issued upon exercise of an option granted hereunder and may issue such
"stop transfer" instructions to its transfer agent in respect of such Shares as,
in its discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares, or
(iii) permit the Company to determine the occurrence of a disqualifying
disposition, as described in Section 421(b) of the Code, of Shares transferred
upon exercise of an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares upon exercise of an option, as well as all fees
and expenses necessarily incurred by the Company in connection with such
issuance or transfer, except fees and expenses which may be necessitated by the
filing or amending of a Registration Statement under the Securities Act, which
fees and expenses shall be borne by the recipient of the Shares unless such
Registration Statement has been filed by the Company for its own corporate
purposes
B-8
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(and the Company so states) in which event the recipient of the Shares shall
bear only such fees and expenses as are attributable solely to the inclusion of
the Shares he or she receives in the Registration Statement, provided that the
Company shall have no obligation to include any shares in any Registration
statement.
All Shares issued as provided herein shall be fully paid and non-assessable
to the extent permitted by law.
SECTION XVII
WITHHOLDING TAXES
The Company may require an employee exercising a Non-Qualified Option or
disposing of Shares acquired pursuant to the exercise of an Incentive Option in
a disqualifying disposition (within the meaning of SECTION 421(b) of the Code)
to reimburse the corporation that employs such employee for any taxes required
by any government to be withheld or otherwise deducted and paid by such
corporation in respect of the issuance or disposition of Shares. In lieu
thereof, the corporation that employs such employee shall have the right to
withhold the amount of such taxes from any other sums due or to become due from
such corporation to the employee upon such terms and conditions as the Board of
Directors or the Committee, as the case may be, shall prescribe.
SECTION XVIII
LISTING OF SHARES AND RELATED MATTERS
If at any time the Board of Directors shall determine in its discretion
that the listing, registration or qualification of the Shares covered by the
Plan upon any national securities exchange or under any state or federal law or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, no Shares shall be issued unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained, or otherwise provided for, free of any conditions not acceptable to
the Board of Directors.
SECTION XIX
AMENDMENT OF THE PLAN
The Board of Directors may, from time to time, amend the Plan without
stockholder approval except to the extent that any such amendment fails to
comply with any applicable provision of the Code, the Employee Retirement Income
Security Act of 1974 or the rules of the New York Stock Exchange or causes the
Plan to fail to be treated as qualified performance-based compensation under
applicable Treasury Regulations.
SECTION XX
TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated by action of the Board of Directors, shall
terminate at the close of business on the Termination Date. An option may not be
granted while the Plan is suspended or after it is terminated. Rights and
obligations under any option granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan, except upon the
consent of the person to whom the option was granted. The power of the Board of
Directors or the Committee, as the case may be, to construe and administer any
options granted prior to the termination or suspension of the Plan under Article
III nevertheless shall continue after such termination or during such
suspension.
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SECTION XXI
GOVERNING LAW
The Plan, such options as may be granted thereunder and all related matters
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware.
SECTION XXII
PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not be deemed to
affect the validity of any other provision.
SECTION XXIII
EFFECTIVE DATE
The Plan shall become effective at 5:00 p.m., New York City time, on the
Effective Date; provided, however, that if the Plan has not been approved by a
vote of the shareholders of the Company at an annual meeting or any special
meeting or by unanimous written consent within twelve (12) months before or
after the Effective Date, the Plan and any options granted thereunder shall
terminate.
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(AGCO Logo)
38
PROXY AGCO CORPORATION
4205 RIVER GREEN PARKWAY
DULUTH, GEORGIA 30096
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, APRIL 25, 2001
The undersigned hereby appoints Donald R. Millard and Stephen D. Lupton 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, 2001 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
Wednesday, April 25, 2001, and any adjournments thereof.
THIS PROXY 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.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as [ ] WITHHOLD AUTHORITY to vote for all
marked to the contrary) nominees listed below
Nominees: W. Wayne Booker, Gerald B. Johanneson, Curtis E. Moll and Robert J.
Ratliff
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below.
--------------------------------------------------------------------------------
2. Approve the AGCO Corporation 2001 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote as described in the
proxy statement and upon such other business as may properly come before the
meeting.
---------------------------------------
Signature
---------------------------------------
Signature, if held jointly
Dated: , 2001
--------------------------
NOTE: PLEASE SIGN ABOVE EXACTLY AS NAME
APPEARS ON STOCK CERTIFICATE. IF STOCK IS
HELD IN THE NAME OF TWO OR MORE PERSONS, ALL
MUST SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF
A CORPORATION, PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.