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:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under 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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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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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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(AGCO LOGO)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2002
The Annual Meeting of Stockholders of AGCO Corporation will be held at the
offices of the Company, 4205 River Green Parkway, Duluth, Georgia 30096 on
Thursday, April 25, 2002, at 9:00 a.m., local time, for the following purposes:
1. To elect three directors to serve for the ensuing three years or
until their successors have been duly elected and qualified;
2. To approve the Amended and Restated Certificate of Incorporation of
AGCO Corporation; 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 15, 2002 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, 2002 until the annual
meeting, a list of stockholders as of the close of business on March 15, 2002
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 CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. IN THE EVENT YOU ARE ABLE TO ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
ROBERT J. RATLIFF
Chairman of the Board, President and
Chief Executive Officer
Atlanta, Georgia
March 29, 2002
AGCO CORPORATION
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PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2002
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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 a proxy. You
may indicate a vote in connection with the election of directors or for or
against the other proposals on the proxy card and your shares will be voted
accordingly. If you indicate a preference to abstain on any 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 card
signed and returned by you may be revoked at any time before it is voted by
signing and duly delivering a proxy card 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 card 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 1, 2002. The Company's 2001 Summary Annual Report to its
stockholders and its annual report on Form 10-K for the 2001 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 15, 2002,
are entitled to notice of and to vote at the annual meeting to be held on April
25, 2002 (the "Annual Meeting"). On March 15, 2002, the Company had outstanding
74,147,779 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.
QUORUM REQUIREMENT
A quorum of the Company's stockholders is necessary to hold a valid
meeting. 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.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by the
inspector of elections appointed for the meeting who also will determine whether
a quorum is present for the transaction of business. Abstentions and broker
"non-votes" will be treated as shares that are present and entitled to vote for
purposes of determining whether a quorum is present. A broker non-vote occurs on
an item when a broker is not permitted to vote on that item without instruction
from the beneficial owner of the shares and no instruction is given.
VOTE NECESSARY FOR THE ELECTION OF DIRECTORS
Directors are elected by a plurality of the shares of Common Stock actually
voted (in person or by proxy) at the Annual Meeting. Withheld votes and
abstentions have no effect. Under the New York Stock Exchange rules, if your
broker holds your shares in its name, your broker is permitted to vote your
shares with respect to the election of directors even if it does not receive
voting instructions from you.
VOTE NECESSARY FOR APPROVAL OF THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
Approval of the Amended and Restated Certificate of Incorporation of the
Company requires the affirmative vote of a majority of the votes of the
outstanding shares of Common Stock of the Company. Withheld votes and
abstentions have the same effect as a vote against. Under the New York Stock
Exchange rules, if your broker holds your shares in its name, your broker is
permitted to vote your shares with respect to the approval of the Amended and
Restated Certificate of Incorporation even if it does not receive voting
instructions from you.
OTHER MATTERS
With respect to any other matter that may properly come before the Annual
Meeting for stockholder consideration, withheld votes and 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
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 three directors to serve as Class I
directors. The Governance Committee has recommended, and the Board of Directors
has nominated, the three individuals named below to serve as Class I directors
until the annual meeting in 2005 or until their successors have been duly
elected and qualified.
On January 4, 2002, the Company was saddened by the deaths of John M.
Shumejda, who was serving as a Director and the Chief Executive Officer and
President of the Company, and Edward R. Swingle, the Company's Senior Vice
President of Sales and Marketing. Mr. Shumejda was a Class I director and his
term as a director would have expired at the Annual Meeting. Following Mr.
Shumejda's death, the Board of Directors appointed Robert J. Ratliff, the
Executive Chairman of the Board, to serve as the Company's President and Chief
Executive Officer. In addition, the Board of Directors reduced the number of
directors from eleven to ten and the number of Class I directors from four to
three.
The following is a brief description of the business experience of each of
the three nominees for Class I directorship:
Wolfgang Deml, age 56, 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
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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 66, 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 Chairman of its J. Rothschild International Assurance
plc subsidiary since December 1995. Mr. Loehnis also serves as
Non-Executive Director of Tokyo-Mitsubishi International plc and Alpha Bank
London Limited. 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 64, 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 -- European Operations G.E.
Lighting, President and Chief Executive Officer -- BG Automotive Motors,
Inc. and, most recently, Vice President and General Manager -- 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.
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,
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.
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 2003 and 2004, as
indicated.
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 70, 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 71, 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 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., Hannover Seguros S.A., Atlas Copco do Brasil
Ltda., Icatu Holding, and WTC-World Trade Center -- Sao Paulo. He is also
honorary president of 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
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Volkswagen for its operations in Argentina and Brazil, and served as
President and Chief Executive Officer of the Ford-Volkswagen 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. Since 2002, he has
been a member of the Advisory Council of the United Nations Global Compact.
Henk Visser, age 57, has been a Director of the Company since April
2000. Mr. Visser is Chief Financial Officer of NUON N.V. Currently, Mr.
Visser is Chairman of Bever Holding N.V., Royal Huisman Shipyards N.V., and
serves on the boards of Sobel N.V., Friesland Bank N.V. Foundation OPG N.V.
and is Chairman of the alumni of the economics faculty at Free University.
Mr. Visser has served on the boards of major international corporations and
institutions including the Amsterdam Stock Exchange, Amsterdam Institute of
Finance and International Farm Management Association.
Directors who are continuing in office as Class III Directors whose terms
expire at the annual meeting in 2004 are listed below:
W. Wayne Booker, age 66, has been a Director of the Company since
October 2000. Mr. Booker served as Vice Chairman of Ford Motor Company from
1996 to 2001. In addition, Mr. Booker was a Vice President of Ford from
1989 until 2001. Mr. Booker currently service on the boards of several
international councils.
Gerald B. Johanneson, age 61, 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 62, 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 70, is currently the President and Chief
Executive Officer of the Company, positions he undertook following the
death of Mr. Shumejda in January 2002. In addition, Mr. Ratliff has served
as the Executive Chairman of the Board of Directors since January 1999, the
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.
BOARD OF DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD
During 2001, the Board of Directors held seven 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 pays the Chairman of the Executive
Committee of the Board, Mr. Claycamp in 2001 and Mr. Booker in 2002, an annual
fee in lieu of the retainer fee of $60,000. In 2001, the Company paid Mr.
Claycamp an annual fee of $120,000 for serving as a marketing consultant to the
Company and Mr. Momot an annual fee of $120,000 for serving as a manufacturing
consultant to the Company. The Company does not currently have any consulting
arrangements with directors. In addition to the above fees, each non-employee
director receives a grant of 5,000 shares under the Company's 2001 Stock Option
Plan at the time he is elected or reelected 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
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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
The AGCO Corporation Nonemployee Director Stock Incentive Plan (the
"Director Plan") provides additional opportunities for nonemployee directors to
earn shares of the Company's Common Stock if performance goals (measured solely
by increases in the price of the Common Stock) are met. Pursuant to the Director
Plan, each nonemployee director is awarded the right to receive shares of Common
Stock which can be earned during a three year performance period. 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 bonus payment designed to
satisfy a portion of the federal and state income tax obligations is paid by the
Company to each participant. In addition, the participant may elect to forfeit a
portion of an earned award in order to fully satisfy the tax obligation which is
payable at the time the shares and the related cash bonus are earned. The number
of shares of common stock forfeited is equal to the value of the participant's
tax liability net of the cash bonus.
As of March 15, 2002, there were awards totaling 45,280 shares that were
earned but not vested under the Director Plan.
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 2001 and is currently composed of Messrs. Booker (Chairman),
Johanneson, Moll, Ratliff and Sauer.
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 six meetings in 2001 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
2001 Stock Option Plan, the Long-Term Incentive Plan and the Director Plan.
The Compensation Committee held five meetings in 2001 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."
5
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 2001 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 seven meetings in 2001 and is currently composed of
Messrs. Claycamp, Johanneson, Momot, Ratliff and Sauer (Chairman).
During fiscal 2001, 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, with the exception of Messrs. Visser and Booker who each
attended 67% of all meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2001, 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 2001.
PROPOSAL NUMBER 2
APPROVAL OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
In February 2002, the Board of Directors unanimously approved, subject to
stockholder approval, an Amended and Restated Certificate of Incorporation (the
"New Certificate"). The New Certificate would amend and restate the existing
Certificate of Incorporation, as previously amended (the "Existing
Certificate"), to consolidate all of the previous amendments to the original
Certificate of Incorporation in one document and to make certain other technical
amendments to the Existing Certificate. The original Certificate of
Incorporation was initially filed with the Secretary of State of Delaware on
April 22, 1991, and established the corporate existence of the Company. The
Existing Certificate consists of sixteen documents, including the original
Certificate of Incorporation and all amendments thereto.
The New Certificate would make the following amendments:
- Amend the purpose of the Company to reflect current Delaware corporate
practice;
- Eliminate the classes of preferred stock that were at one point issued
but since have been retired;
- Consolidate certificates filed in connection with prior merger
transactions, which certificates had the effect of amending the
Certificate of Incorporation; and
- Make minor changes intended to clarify the wording of the Certificate of
Incorporation.
The text of the New Certificate is attached as Appendix A. The Company
urges each stockholder to carefully read the New Certificate in its entirety
before voting.
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ANALYSIS OF THE PROPOSAL
The principal purpose of the amendment and restatement of the Company's
Certificate of Incorporation is to simplify the Company's Certificate of
Incorporation by consolidating various amendments and eliminating obsolete
provisions of the Existing Certificate. The Board does not consider any of the
changes effected by this Proposal to be material, nor does the Board anticipate
that any of these changes will affect the governance, business, operations or
prospects of the Company.
The summary of the New Certificate that appears below is qualified in its
entirety by reference to the full text of the Amended and Restated Certificate
of Incorporation in Appendix A.
Corporate Purpose. The Existing Certificate provides, in the Third
Article, a long litany of specific activities in which the Company may engage.
Rather than listing out any specific activities, the New Certificate would
provide, in the Third Article, that "[t]he purpose of the Corporation is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware." The wording of the proposed new
purpose clause in the New Certificate follows the wording of the General
Corporation Law of Delaware more closely than the purpose clause of the Existing
Certificate. The Board believes that the new purpose clause would allow the
Company to engage in activities to the maximum extent permitted under Delaware
law.
Elimination of Classes of Preferred Stock. The New Certificate eliminates
all references to classes of preferred stock of the Company that were once
issued but since have been retired. The only class of preferred stock retained
in the New Certificate is the Junior Cumulative Preferred Stock, which is the
only class of preferred stock that currently is authorized under the Existing
Certificate. The Board believes that the elimination of references to the now
retired preferred stock will eliminate confusion that may be created by the
prior amendments to the Existing Certificate that established and then retired
those classes of preferred stock. The amendments in the New Certificate would
not preclude the Board of Directors from authorizing and issuing additional
series of preferred stock in the future.
Elimination of Prior Certificates of Merger. The Existing Certificate has
been amended by certificates filed in connection with prior merger transactions.
In each of these mergers, wholly owned subsidiaries of the Company or holding
companies have merged into the Company, with the Company being the surviving
corporation. The New Certificate would consolidate the effects of these merger
certificates and eliminate reference to the non-surviving corporations. The
Board believes that the consolidation of these certificates would simplify the
Existing Certificate and eliminate confusion that may be caused by the existence
of certificates of merger as part of the Existing Certificate.
If the stockholders approve the New Certificate described above, the
Company will file the New Certificate with the Secretary of State of the State
of Delaware shortly after the Annual Meeting. The New Certificate will become
effective upon filing with the Delaware Secretary of State.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE AGCO
CORPORATION AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
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 and the approval of
the amended and restated certificate of incorporation. If any other business
should properly come before the meeting, the persons named in the accompanying
proxy card intend to vote thereon in accordance with their best judgment.
7
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth certain information as of March 15, 2002
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 PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS(1)
------------------- ------------- --------
Forstmann-Leff Associates, LLC(2)........................... 8,541,072 11.5%
590 Madison Avenue
New York, New York 10022
Massachusetts Financial Services(3)......................... 4,576,140 6.2%
500 Boylston Street
Boston, Massachusetts 02116
Dimensional Fund Advisors, Inc.(4).......................... 4,178,696 5.6%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Wellington Management Company, LLP(5)....................... 4,019,200 5.4%
75 State Street
Boston, Massachusetts 02109
---------------
(1) Based on 74,147,779 shares of Common Stock outstanding on March 15, 2002.
(2) Based on the Amendment No. 3 to Schedule 13G filed on February 14, 2002.
Includes shares beneficially owned by FLA Asset Management, LLC, FLA
Advisers LLC, and Forstmann-Leff International, LLC.
(3) Based upon Amendment No. 1 to Schedule 13G filed on February 11, 2002.
(4) Based upon the Amendment to Schedule 13G filed on January 30, 2002.
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 on January 30, 2002 are
owned by the Funds. Dimensional disclaims beneficial ownership of such
securities.
(5) Based upon Schedule 13G filed on February 14, 2002. Wellington Management
Company, LLP, in its capacity as investment adviser, may be deemed to
beneficially own the shares of the Company which are held of record by
clients of Wellington Management Company, LLP.
8
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock by the Company's directors, the Chairman,
President and Chief Executive Officer of the Company, and the other Named
Executive Officers (excluding Mr Shumejda and Mr. Swingle -- See note (6) below)
and all executive officers and directors as a group, all as of March 15, 2002.
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)....................................... 356,391 *
W. Wayne Booker............................................. 6,000 *
Henry J. Claycamp........................................... 17,252 *
Wolfgang Deml............................................... 6,000 *
Gerald B. Johanneson........................................ 16,500 *
Anthony D. Loehnis.......................................... 9,000 *
Curtis E. Moll.............................................. 9,000 *
David E. Momot.............................................. 4,000 *
Wolfgang Sauer.............................................. 9,000 *
Henk Visser................................................. 7,000 *
Norman L. Boyd.............................................. 46,283 *
Donald R. Millard........................................... 80,998 *
All executive officers and directors as a group (18
persons).................................................. 848,140 1.1%
---------------
* Less than one percent.
(1) Includes shares which may be purchased upon exercise of options which are
exercisable as of March 15, 2002 or become exercisable within 60 days
thereafter, for the following individuals: Mr. Ratliff -- 9,000; Mr.
Booker -- 2,000; Mr. Claycamp -- 3,000; Mr. Johanneson -- 7,000; Mr.
Moll -- 5,000; Mr. Visser -- 3,000; Dr. Sauer -- 3,000; Mr. Boyd -- 5,200;
all executive officers and directors as a group -- 49,200.
(2) Includes the following numbers of restricted shares of the Company's Common
Stock earned under the Long-Term Incentive Plan by the following
individuals: Mr. Boyd -- 41,083; Mr. Millard -- 80,998; all executive
officers and directors as a group -- 321,785.
(3) Includes the following numbers of restricted shares of the Company's Common
Stock earned under the Director Plan by the following individuals: Mr.
Booker -- 4,000; Mr. Claycamp -- 5,280; Mr. Deml -- 6,000; Mr.
Johanneson -- 6,000; Mr. Loehnis -- 6,000; Mr. Moll -- 4,000; Mr.
Momot -- 4,000; Dr. Sauer -- 6,000; Mr. Visser -- 4,000; all executive
officers and directors as a group -- 45,280.
(4) Any securities not outstanding which are subject to options which are
exercisable as of March 15, 2002 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
74,147,779 shares of Common Stock outstanding on March 15, 2002.
(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 68,360 shares of Common
Stock owned by a family limited partnership of which Mr. Ratliff is a member
of the general partner company, but does not control the general partner.
Mr. Ratliff disclaims beneficial ownership of these shares.
(6) As of January 4, 2002, Mr. Shumejda and Mr. Swingle had beneficial ownership
of 278,522 shares and 199,723 shares, respectively, representing less than
one percent of the outstanding shares on March 15, 2002.
9
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 2001, 2000
and 1999, 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 since the death of Mr. Shumejda on
January 4, 2002, has served as Chief Executive Officer, 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 COMPENSATION STOCK AWARDS COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS($)(3) ($)(4) ($)(5) ($)(6)
------------------ ---- ---------- ----------- ------------ ------------ ------------
Robert J. Ratliff............. 2001 $1,000,000 $ -- $ 82,525 $311,200 $ 4,800
President, Chief Executive 2000 1,000,000 -- 25,200 -- 4,800
Officer and Executive 1999 1,000,000 -- 12,500 -- 19,243
Chairman of the Board
John M. Shumejda(1)........... 2001 649,704 227,396 520,453 255,635 16,556
Former President and Chief 2000 607,200 524,924 883,261 -- 32,156
Executive Officer until 1999 486,036 -- 942,440 -- 94,070
January 4, 2002
Edward R. Swingle(1).......... 2001 305,000 205,875 219,567 191,326 40,535
Former Senior Vice
President, 2000 290,872 251,459 385,524 -- 43,119
Sales and Marketing, North 1999 258,154 -- 456,131 -- 38,031
and South America until
January 4, 2002
Norman L. Boyd................ 2001 252,888 75,993 187,714 155,600 26,891
Senior Vice President, 2000 233,731 202,060 151,904 -- 29,091
Corporate Development 1999 212,483 -- 78,042 -- 8,879
Donald R. Millard(2).......... 2001 350,016 122,500 93,300 233,250 21,195
Senior Vice President and 2000 71,798 62,069 -- -- 2,154
Chief Financial Officer 1999 -- -- -- -- --
---------------
(1) Mr. Shumejda's and Mr. Swingle's compensation is also discussed because they
served as executive officers of the Company throughout the year ended
December 31, 2001, and until their deaths on January 4, 2002.
(2) Mr. Millard joined the Company in October 2000 as Senior Vice President and
Chief Financial Officer.
(3) For Messrs. Shumejda, Swingle, Boyd and Millard, 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.
(4) 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 -- $509,987 in 2001, $873,480 in 2000, and $935,609 in
1999; Mr. Swingle -- $216,622 in 2001, $382,579 in 2000 and $453,186 in
1999; Mr. Boyd -- $185,502 in 2001, $150,329 in 2000 and $76,467 in 1999;
Mr. Millard -- $93,300 in 2001. Other Annual Compensation also includes 3%
of the executive's salary that exceeds the maximum compensation limits under
the Company's 401(k) savings plan. Other Annual Compensation for Mr. Ratliff
in 2001 also includes the benefit for personal use of an airplane and
automobile leased by the Company in the amount of $70,025.
(5) Restricted Stock Awards represents restricted shares of Common Stock of the
Company pursuant to the Company's Long-term Incentive Plan ("LTIP"). At
March 15, 2002, the number and value of the
10
aggregate shares of restricted Common Stock beneficially held by each of the
participants named above pursuant to the LTIP were as follows: Mr. Boyd,
41,083 shares with a value of $892,323; and Mr. Millard, 80,998 shares with
a value of $1,759,277 Awards earned under the LTIP by Mr. Ratliff have no
restrictions.
(6) All Other Compensation for 2001 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 -- $11,756; Mr. Swingle -- $35,735; Mr.
Boyd -- $22,091 and Mr. Millard -- $16,395, and (ii) contributions to the
Company's 401(k) Savings Plan in the amount of $4,800 for Messrs. Ratliff,
Shumejda, Swingle, Boyd and Millard.
STOCK OPTIONS
The Company did not grant any stock options pursuant to the Company's 1991
Stock Option Plan or the Company's 2001 Stock Option Plan, which replaced the
1991 Stock Option Plan in April 2001, during the fiscal year ended December 31,
2001, to any of the Named Executive Officers.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options
exercised during the last fiscal year and the unexercised options held as of the
end of the fiscal year under the Company's Option Plan for the Named Executive
Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2001 AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2000(#) DECEMBER 31, 2000($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Robert J. Ratliff........... $-- $-- 9,000 -- $119,520 $--
John M. Shumejda............ -- -- -- -- -- --
Edward R. Swingle........... -- -- -- -- -- --
Norman L. Boyd.............. -- -- 5,200 -- $ 5,756 --
Donald R. Millard........... -- -- -- -- -- --
---------------
(1) Based on the market price of the Company's Common Stock on December 31, 2001
($15.78), less the exercise price of "in-the-money" options.
EMPLOYMENT CONTRACTS
The Company currently has employment contracts with Mr. Ratliff, Mr. Boyd
and Mr. Millard. The employment contracts provide for base salaries at the
following rates per annum: Mr. Ratliff -- $1,000,000; Mr. Boyd -- $252,890; and
Mr. Millard -- $350,000. Mr. Ratliff's contract expires in 2003. Additional
details about Mr. Ratliff's contract are discussed in the section entitled
"Compensation of the Chairman of the Board and Chief Executive Officer" under
the heading "Compensation Committee Report on Executive Compensation." Mr.
Boyd's and Mr. Millard's employment contracts continue in effect until
terminated in accordance with the terms of the contract.
Mr. Shumejda and Mr. Swingle also had employment contracts in effect with
the Company during 2001. The employment contracts provided for base salaries at
the following rates per annum: Mr. Shumejda -- $680,000; Mr.
Swingle -- $330,000.
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 Management
Incentive Compensation Plan (the "Management Incentive Compensation Plan"). See
"Compensation Committee Report on Executive Compensation." The contracts further
provide that each officer
11
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 EXPRESSLY 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.
Management is responsible for the Company's internal controls, financial
reporting process and compliance with the laws and regulations and ethical
business standards. The independent auditors are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes and to report its findings to the Board of Directors. The Audit
Committee members are not professional accountants or auditors, and their
functions are not intended to duplicate or to certify the activities of
management and the independent auditor, nor can the Committee certify that the
independent auditor is "independent" under applicable rules. The Committee
serves a board-level oversight role, in which it provides advice, counsel and
direction to management and the auditors on the basis of the information it
receives, discussions with management and the auditors and the experience of the
Committee's members in business, financial and accounting matters.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2001.
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, 2001, June
30, 2001, and September 30, 2001, 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,
2001.
12
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 2001, subsidiary statutory audits and the reviews of the financial
statements included in the Company's Form 10-Q during such fiscal year were
$1,430,000.
FINANCIAL AND OPERATIONAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees billed by Arthur Andersen LLP for professional services
rendered for financial and operational information systems design and
implementation for fiscal year 2001 were $2,066,211.
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 and operational information systems
design and implementation fees above were $1,895,102. These fees were primarily
for services associated with tax planning and compliance, internal audit and
securities filings. The Audit Committee considers the provision of these
services to be compatible with maintaining the independence of Arthur Andersen
LLP. 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.
In past years, the Audit Committee has recommended the appointment of
independent public accountants for the current year to the Board of Directors,
which in turn would approve such appointment prior to the annual meeting of
stockholders. Arthur Andersen LLP has served as the Company's independent
auditors since 1990. This year, in light of the events surrounding Arthur
Andersen LLP, the Company has not yet selected independent public accountants to
perform the audit of the 2002 financial statements. The Audit Committee will
continue to monitor the situation carefully and to gather additional
information. The Audit Committee intends to make a decision with respect to the
appointment of the Company's independent public accountants for 2002 that we
believe to be in the best interests of the Company and its stockholders. The
Board of Directors is expected to approve the auditors for 2002 based on a
recommendation of the Audit Committee.
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 Chairman, President and 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.
13
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.
Section 162(m) of the Internal Revenue Code disallows 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.
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, President and Chief Executive Officer and the
other Named Executive Officers during 2001 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 compensa-
14
tion 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 Mr.
Millard's objectives based entirely upon corporate performance. For the year
ended December 31, 2001, the corporate objectives were based on targets for
earnings per share and free cash flow. Mr. Ratliff does not participate in the
Management Incentive Compensation Plan.
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 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 addition, a participant may elect to forfeit a
portion of an earned award in order to fully satisfy federal, state and
employment taxes which are payable at the time the shares and the related cash
bonus are earned. The number of shares of common stock equal to the value of the
participant's tax liability, net of the cash bonus, are thereby forfeited in
lieu of an additional cash payment contributed to the participant's tax
withholding. 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 2001 Stock Option Plan as a
long-term incentive for key employees who do not participate in the LTIP and
directors. In April 2001, the Company replaced the
15
original 1991 Option Plan with the 2001 Option Plan. The objective of the plan
is similar to those of the LTIP in aligning executive and stockholder long-term
interests by creating a strong and direct link between executive compensation
and stockholder return and enabling executives to develop and maintain a
significant, long-term stock ownership position in the Company's Common Stock.
The 2001 Option Plan authorizes 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 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. The estimated annual benefit under the
SERP for Mr. Ratliff at the expiration of his contract in 2003 is $338,705. The
estimated annual benefits for Mr. Boyd and Mr. Millard at age 65 are $83,955 and
95,838, respectively.
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 provides to certain executives limited personal
use of a private airplane paid for by the Company.
COMPENSATION OF THE EXECUTIVE CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER
Throughout 2001, Mr. Ratliff served as Executive Chairman of the Board
under his 1995 employment contract, 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. As of March 15, 2002, Mr. Ratliff has earned
90,000 shares under the February 2000 grant, of which 15,998 shares were
forfeited to satisfy tax liabilities on the earned shares and related cash
bonus. Under the terms of Mr. Ratliff's employment contract, all shares earned
by Mr. Ratliff pursuant to the LTIP carry no restrictions.
16
Throughout 2001, Mr. Shumejda served as President and Chief Executive
Officer under an employment contract dated January 1, 1996, Mr. Shumejda's
compensation was principally comprised of a base salary of $649,704 per annum,
participation in the Management Incentive Compensation Plan and restricted stock
awards pursuant to the LTIP. Mr. Shumejda's total compensation was 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. Mr. Shumejda earned 25,000 shares under the February grant, of which
8,571 shares were forfeited to satisfy tax liabilities on the earned shares and
related cash bonus. Upon his death, the restrictions on transfer of shares
earned under the LTIP were removed in accordance with the provisions of the
LTIP.
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.
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
17
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
(PERFORMANCE GRAPH)
----------------------------------------------------------------------------------------------------------------------------
12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98
----------------------------------------------------------------------------------------------------------------------------
AGCO Corporation $100 $ 97 $126 $111 $102 $104 $ 72 $ 23
S&P Mid-Cap 400 100 99 113 131 132 147 144 123
S&P
Machinery-Diversified 100 101 127 132 128 140 125 88
-------------------- -----------------------------------------------------------------------------------------------------
12/98 3/99 6/99 9/99 12/99 3/00 6/00 9/00
-------------------- -----------------------------------------------------------------------------------------------------
AGCO Corporation $ 28 $ 23 $ 40 $ 46 $ 47 $ 40 $ 43 $ 42
S&P Mid-Cap 400 157 147 168 154 180 203 197 221
S&P
Machinery-Diversifi 97 99 125 114 112 98 90 87
-------------------- --------------------------------------------------------------
12/00 3/01 6/01 9/01 12/01
-------------------- --------------------------------------------------------------
AGCO Corporation $ 43 $ 34 $ 32 $ 32 $ 56
S&P Mid-Cap 400 212 189 214 179 211
S&P
Machinery-Diversifi 115 102 110 99 120
---------------
* Assumes $100 invested in the Company's Common Stock as of December 31, 1996.
Assumes the investment of the same amount as of December 31, 1996 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.
18
EXECUTIVE OFFICERS
The following table sets forth information as of March 15, 2002, with
respect to each person who is an executive officer of the Company.
NAME AGE POSITIONS
---- --- ---------
Robert J. Ratliff..................... 70 Executive Chairman of the Board,
President and Chief Executive Officer
Garry L. Ball......................... 54 Senior Vice President -- Engineering
and Product Development
Norman L. Boyd........................ 58 Senior Vice President -- Corporate
Development
Stephen D. Lupton..................... 57 Senior Vice President, General Counsel
and Secretary
Donald R. Millard..................... 54 Senior Vice President and Chief
Financial Officer
James M. Seaver....................... 55 Senior Vice President -- Sales and
Marketing, Worldwide
Brian C. Truex........................ 42 Senior Vice President -- Manufacturing
Technologies and Quality
Adri Verhagen......................... 60 Senior Vice President -- Special
Projects
For a description of Messrs. Ratliff's business experience, see "Directors
Continuing in Office."
Garry L. Ball has been Senior Vice President -- Engineering and Product
Development of the Company since June 2001. From 2000 to 2001, Mr. Ball was Vice
President of Engineering at CapacityWeb.com. From 1999 to 2000, Mr. Ball was
employed as Vice President of Construction Equipment New Product Development at
CNH Global N.V. Prior to that assignment, he held several key positions
including Vice President of Engineering Agricultural Tractor for New Holland
N.V., Europe, and Chief Engineer for Tractors at Ford New Holland.
Norman L. Boyd has been Senior Vice President -- Corporate Development of
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 of 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 of the Company 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 served
as Chief Financial Officer of Matria Healthcare. Mr. Millard also served 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.
James M. Seaver has been Senior Vice President -- Sales and Marketing
Worldwide of the Company since January 2002. Mr. Seaver was previously Chief
Executive Officer, AGCO Finance for the Company from June 1999 to January 2002.
Mr. Seaver was Senior Vice President, Worldwide Sales from September 1998 to May
1999; Executive Vice President, Sales and Marketing from February 1997 to
September 1998; President, Corporate Sales and Marketing from August 1996 to
February 1997; Executive Vice President, Sales and Marketing from January 1996
to August 1996; Senior Vice President, Sales and Marketing,
19
Americas from February 1995 to January 1996; and Vice President, Sales, Americas
from May 1993 to February 1995.
Brian C. Truex has been Senior Vice President -- Manufacturing Technologies
and Quality of the Company since June 2001. Mr. Truex previously was with The
Stanley Works, where he served as Director of Operations, Stanley Mechanics
Tools, from 2000 to 2001. From 1994 -- 2000, he was employed by Halliburton
Company, where he served in various manufacturing positions including Director,
Manufacturing Excellence Group.
Adri Verhagen has been Senior Vice President -- Special Projects of the
Company since January 2002. He previously served as Senior Vice President of
Sales and Marketing, Europe/Africa/Middle East and East Asia/Pacific from June
1999 to January 2002. 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At March 15, 2002, the Company had loans outstanding to executive officers
for the purpose of exercising stock options bearing interest at 6% as follows:
Robert J. Ratliff -- $90,000, Norman L. Boyd -- $153,325, and James M.
Seaver -- $60,000. In addition, the Company had a loan to Mr. Ratliff in the
amount of $4,000,000 related to an executive life insurance program. The loan
bears no interest and the Company has agreed to reimburse Mr. Ratliff for his
annual tax liability associated with the loan.
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 2001, the Company had net sales of $87.0 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.
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, 2001, 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 2001 fiscal year, including financial statements and schedules
thereto but excluding other exhibits, is being furnished with this proxy
statement to stockholders of record as of March 15, 2002.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge a copy of its Annual Report filed
on Form 10-K for the 2001 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 15, 2002. The written request should be directed
to: Corporate Secretary, AGCO Corporation, 4205 River Green Parkway, Duluth,
Georgia 30096.
20
INDEPENDENT PUBLIC ACCOUNTANTS
A representative of Arthur Andersen LLP, the Company's independent public
accountants for 2001, 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.
The Company has not yet selected independent public accountants to perform
the audit of the 2002 financial statements. The Board of Directors is expected
to approve the auditors for 2002 based on a recommendation of the Audit
Committee.
STOCKHOLDERS' PROPOSALS
Any stockholder of the Company who wishes to present a proposal at the 2003
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 2, 2002; 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 2002 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 2003
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 14, 2003, 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.
21
APPENDIX A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AGCO CORPORATION
(REFLECTING AMENDMENTS THROUGH APRIL 25, 2002)
AGCO Corporation, a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name under which the corporation was originally incorporated was
AGCO Holding Corporation. The date of filing of its original Certificate of
Incorporation with the Secretary of State was April 22, 1991.
2. This Amended and Restated Certificate of Incorporation was duly adopted
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of Delaware.
3. The Certificate of Incorporation of the Corporation, as amended or
supplemented heretofore, is hereby amended and restated by this Amended and
Restated Certificate of Incorporation to read in full as follows:
FIRST: The name of the corporation is AGCO Corporation.
SECOND: The address of the corporation's registered office in the
state of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, and the name of the registered agent thereat is The Corporation
Trust Company.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of all classes of stock which the
corporation is authorized to issue is 151,000,000, of which 1,000,000
shares, having a par value of $.01 per share, will be Preferred Stock and
150,000,000 shares, having a par value of $.01 per share will be Common
Stock.
The designations and the powers, preferences and rights and the
qualifications, limitations or restrictions in respect of the shares of each
class of stock will be as follows:
(a) Voting Rights.
The holders of the Common Stock shall have the exclusive voting power for
all purposes and the holders of the Preferred Stock shall have no voting rights
or voice whatsoever in the affairs or management of the corporation or the right
to notice of any meeting of stockholders, except (i) as set forth in Annex A
hereto with respect to the corporation's Junior Cumulative Preferred Stock, (ii)
as may be set forth in the resolution or resolutions of the Board of Directors
which may be hereafter adopted pursuant to Section 4(b) below, or (iii) as
specifically required by law.
On all matters to be voted or acted upon by the stockholders, each holder
of the Common Stock will be entitled to one vote for each share of such stock
held of record in the holder's name on the books of the corporation at the time
determined according to law, and each holder of Preferred Stock will be entitled
to such vote, if any, as may be specified by the Board of Directors pursuant to
Section 4(b) below.
(b) Terms of Preferred Stock.
Except as otherwise provided herein or by law, the Board of Directors of
the corporation is expressly authorized to provide for the issuance of all or
any shares of Preferred Stock in one or more classes or series, and to fix for
each such class or series such voting powers, full or limited, or no voting
powers, and such distinctive designations, preferences and relative,
participating, optional or other special rights, and such qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issuance of such class or series and as may be permitted by the General
Corporation Law of the State of Delaware, including, without limitation, the
authority to provide that any such class or series may be (i) subject to
redemption at any such time or times
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and at such price or prices; (ii) entitled to receive dividends (which may be
cumulative or non-cumulative) at such rates, on such conditions, and at such
time, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series; (iii) entitled to
such rights upon the dissolution of, or upon any distribution of the assets of,
the corporation; or (iv) convertible into, or exchangeable for, shares of any
other class or classes of stock, or of any other series of the same or any other
class or classes of stock, of the corporation at such price or prices or at such
rates of exchange and with such adjustments, all as may be stated in such
resolution or resolutions.
(c) Junior Cumulative Preferred Stock. The corporation's certificate of
incorporation shall include the provisions set forth in Annex A, which
provisions contain the terms of the corporation's Junior Cumulative Preferred
Stock, which provisions were filed with the Secretary of State on May 3, 1994,
in a Certificate of Designations.
FIFTH: The number of directors of the corporation shall be such as
from time to time may be fixed by, or in the manner provided in, the
By-laws, but in no case shall the number be less than the minimum number
authorized by the laws of Delaware. Directors need not be stockholders. The
elections of directors need not be by ballot.
SIXTH: A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the Director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law as the same exists or hereafter may be
amended, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of
the liability of directors, then, in addition to the limitation on personal
liability provided herein, the liability of a director of the corporation
shall be limited to the fullest extent permitted by the amended Delaware
General Corporation Law. Any repeal or modification of this paragraph by
the stockholders of the corporation shall be prospective only, and shall
not adversely affect any limitation on the personal liability of a director
or the corporation existing at the time of such repeal or modification.
SEVENTH: The Board of Directors shall have the power to make, alter
and amend the By-laws, subject only to such limitations, if any, as the
By-laws of the corporation may from time to time impose.
EIGHTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation or any
amendment hereto in the manner now or hereafter prescribed by law, and all
rights conferred on the stockholders hereunder are granted subject to this
reservation.
4. This Amended and Restated Certificate of Incorporation was duly
executed, acknowledged, and filed in accordance with Section 103 of the Delaware
General Corporation Law.
5. This Amended and Restated Certificate of Incorporation shall be
effective on the date of filing.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated
Certificate of Incorporation this
day of , 2002.
------- -----------------
AGCO Corporation
By:
--------------------------------------
Its:
--------------------------------------
ATTEST:
------------------------------------
By:
-------------------------------
Its:
-------------------------------
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ANNEX A
JUNIOR CUMULATIVE PREFERRED STOCK OF AGCO CORPORATION
There is hereby established a series of the authorized preferred stock of
the Corporation having a par value of $.0l per share, which series shall be
designated as "Junior Cumulative Preferred Stock," shall consist of three
hundred thousand (300,000) shares and shall have the following designations,
preferences, limitations and relative rights, which sometimes are referred to
herein as this "resolution":
1. Certain Definitions. Unless the context otherwise requires, the terms
defined in this Paragraph 1 shall have, for all purposes of this resolution, the
meanings herein specified:
(a) "Board of Directors" shall mean the Board of Directors of the
Corporation and, to the extent permitted by law, any committee of the Board
of Directors authorized to exercise the powers of the Board of Directors.
(b) "Common Stock" shall mean the common stock, par value one
one-hundredth of one dollar ($.0l) per share, of the Corporation, which
term shall include, where appropriate, in the case of a reclassification,
recapitalization or other changes in such Common Stock, or in the case of a
consolidation or merger of this Corporation with or into another
corporation, such consideration to which a holder of a share of Common
Stock would have been entitled upon the occurrence of such event.
(c) "Junior Preferred Stock" shall mean the three hundred thousand
(300,000) shares of Junior Cumulative Preferred Stock, par value $.0l per
share, of the corporation.
(d) "Junior Stock" shall mean the Common Stock and any other class or
series of stock of the Corporation not entitled to receive any dividends
unless all dividends required to have been paid or declared and set apart
for payment on the Junior Preferred Stock and any Parity stock shall have
been so paid or declared and set apart for payment and, for purposes of
Paragraph 3 below, shall mean any class or series of stock of the
Corporation not entitled to receive any assets upon liquidation,
dissolution or winding up of the affairs of the Corporation until the
Junior Preferred Stock and any Parity Stock shall have received the entire
amount to which such stock is entitled upon such liquidation, dissolution
or winding up.
(e) "Parity Stock" shall mean any class or series of stock of the
Corporation entitled to receive payment of dividends on a parity with the
Junior Preferred Stock or entitled to receive assets upon liquidation,
dissolution or winding up of the affairs of the corporation on a parity
with the Junior Preferred Stock.
(f) "Rights Declaration Date" shall mean April 27, 1994.
(g) "Semiannual Dividend Payment Date" shall mean the first day of
March and September in each year.
(h) "Senior Stock" shall mean any class or series of stock of the
Corporation ranking senior to the Junior Preferred Stock and to any Parity
Stock in respect of the right to receive dividends or in respect of the
right to participate in any distribution upon liquidation, dissolution or
winding up of the affairs of the Corporation.
2. Dividend and Distributions. (A) Subject to the prior preferences and
other rights of any Senior Stock, the holders of shares of Junior Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available therefor, semiannual dividends payable
in cash at the rate hereinafter fixed in this Paragraph 2 on each Semiannual
Dividend Payment Date, commencing on the first Semiannual Dividend Payment Date
after the first issuance of any shares or fractions of a share of Junior
Preferred Stock. Semiannual dividends on the Junior Preferred Stock shall be
payable to holders of record of the Junior Preferred Stock on the respective
date not exceeding 50 days preceding such Semiannual Dividend Payment Date as
shall be fixed for this purpose by the Board of Directors, in an amount per
share (rounded to the nearest cent) equal to the greater of (i) five
one-hundredths of one dollar ($.05) or (ii) subject to the
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provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding semiannual Dividend Payment Date,
or, with respect to the first semiannual Dividend Payment Date, since the first
issuance of any share or fraction of a share of Junior Preferred Stock. In the
event the Corporation shall at any time after the Rights Declaration Date (a)
declare any dividend on Common Stock payable in shares of Common Stock, (b)
subdivide the outstanding Common Stock, or (c) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Junior Preferred Stock were entitled immediately
prior to such event under clause (ii) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) No dividend or other distribution may be declared or paid on the Common
Stock (other than a dividend payable in shares of Common Stock or a subdivision
of the outstanding shares of Common Stock) unless, coincidentally with the
declaration of such dividend or such other distribution, the dividend payable on
the Junior Preferred Stock pursuant to clause (ii) of subparagraph (A) above is
declared and the consideration sufficient for the payment thereof set apart from
funds legally available therefor so as to be available then and on the next
Semiannual Dividend Payment Date for the payment in full thereof and for no
other purpose. In the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Semiannual Dividend Payment
Date and the next subsequent Semiannual Dividend Payment Date, a dividend of
five one-hundredths of one dollar ($.05) per share on the Junior Preferred Stock
shall nevertheless be payable on such subsequent Semiannual Dividend Payment
Date.
(C) Dividends on each outstanding share of Junior Preferred Stock shall
begin to accrue and be cumulative from the Semiannual Dividend Payment Date next
following the respective date of issuance of such share unless the date of such
issuance is a Semiannual Dividend Payment Date, in which case dividends shall
accrue and be cumulative from the date of issuance.
(D) The holders of shares of the Junior Preferred Stock shall not be
entitled to receive any dividends thereon other than the cash dividends
specified in this Paragraph 2. Unpaid dividends shall be cumulative and shall
accrue, whether or not declared by the Board of Directors, until the date such
dividends are paid. Accrued but unpaid dividends on the Junior Preferred stock
shall not bear interest. Dividends on account of arrears for any past dividend
periods may be declared and paid at any time, without reference to any
Semiannual Dividend Payment Date, to holders of record of the Junior Preferred
Stock on such date, not more than fifty (50) days preceding the payment date
thereof, as may be fixed by the Board of Directors.
(E) So long as any shares of Junior Preferred Stock shall be outstanding,
the Corporation shall not declare or pay on any Junior Stock any dividend in
cash or property of any sort, nor shall the Corporation make any distribution on
any Junior Stock, or set aside any assets for any such purposes, nor shall any
Junior Stock be purchased, redeemed or otherwise acquired by the corporation or
any of its subsidiaries, nor shall any monies be paid, set aside for payment or
made available for a sinking fund for the purchase or redemption of any Junior
Stock, unless and until all dividends to which the holders of the Junior
Preferred Stock and any Parity Stock have been entitled for all current and all
previous dividend periods have been paid or declared and the consideration
sufficient for the payment thereof set apart so as to be available for the
payment thereof and for no other purpose; provided, however, that nothing
contained in this subparagraph (E) shall prevent the payment of dividends solely
in Junior Stock or the repurchase, redemption or other acquisition solely
through the issuance of Junior Stock.
3. Distributions Upon Liquidation, Dissolution or Winding Up. Subject to
the prior payment in full of the preferential amounts to which a Senior Stock is
entitled, in the event of any liquid on, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of shares of the
Junior Preferred Stock shall be entitled to receive from the assets of the
Corporation available for distribution to the
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shareholders the sum of two hundred dollars ($200) per share, together with the
amount of all cumulative dividends accrued and unpaid thereon to and including
the date of such liquidation, dissolution or winding up, before any payment or
distribution shall be made to the holders of any Junior Stock of the
Corporation, which payment shall be made paripassu to any such payment made to
the holders, if any, of any Parity Stock. The holders of the Junior Preferred
Stock shall be entitled to no other or further distribution of or participation
in any remaining assets of the Corporation after receiving the liquidation price
described above. If, upon distribution of the Corporation's assets in
liquidation, dissolution or winding up, the assets of the Corporation to be
distributed among the holders of the Junior Preferred Stock and to all holders
of any Parity Stock shall be insufficient to permit payment in full to such
holders of the preferential amounts to which they are entitled, then the entire
assets of the Corporation to be distributed to holders of the Junior Preferred
Stock and such Parity Stock shall be distributed pro rata to such holders based
upon the aggregate of the full preferential amounts to which the shares of
Junior Preferred Stock and such Parity Stock would otherwise respectively be
entitled. Neither the consolidation nor merger of the Corporation with or into
any other corporation or corporations nor the sale, transfer, or lease of all or
substantially all the assets of the Corporation shall itself be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Paragraph 3.
4. Voting Rights. (A) Except as otherwise expressly provided in this
Paragraph 4 or as otherwise required by law, the holders of shares of Junior
Preferred Stock shall vote together with the holders of the Common Stock (and
the holders of any other class or series of the Corporation's stock entitled to
vote with the holders of the Common Stock) as a single class for the election of
directors and on all other matters coming before any meeting of the shareholders
of the Corporation or otherwise to be acted upon by the shareholders of the
Corporation, subject to any voting rights granted or which may be granted to
holders of any other class or series of the preferred stock of the Corporation.
Each share of Junior Preferred Stock shall entitle the holder thereof to one
vote on all matters submitted to a vote of the shareholders of the Corporation.
(B) In addition to the voting rights set forth above, if and when dividends
payable on the Junior Preferred Stock shall be in arrears in an amount
equivalent to or exceeding three (3) full semiannual dividends thereon, whether
or not consecutive, the holders of shares of the Junior Preferred Stock, voting
separately as a class, shall be entitled to elect two directors to the Board of
Directors. Directors so elected shall thereupon become additional directors of
the Corporation and the authorized number of directors of the Corporation shall
thereupon be automatically increased by such number. During such times that the
holders of the Junior Preferred Stock, voting as a class, shall be entitled to
elect such additional directors as provided herein, the holders of the Junior
Preferred Stock shall not be entitled to participate in the election of any
other directors with the holders of shares of the Common Stock or any other
class or classes of stock who are entitled to vote for the election of
directors.
Such right of the holders of shares of the Junior Preferred Stock who are
entitled to vote in such manner to elect such additional directors may be
exercised until all dividends in default on the Junior Preferred Stock shall
have been paid or declared and the consideration sufficient for the payment in
full thereof set apart so as to be available for the payment thereof and for no
other purpose; when said dividends shall have been so paid or declared and set
apart such right to elect two directors shall terminate, subject to the vesting
of such voting rights in the event of any such future default or defaults in the
payment of dividends. Whenever the holders of shares of the Junior Preferred
Stock who are entitled to vote in such manner shall be divested of such voting
rights by reason of the payment or the declaration and setting apart of
consideration sufficient for the payment in full of the dividends then in
default, the terms of office of the directors elected as such by the holders of
shares of the Junior Preferred Stock shall forthwith terminate and the number of
the directors of the corporation shall be reduced correspondingly.
At any time after such voting rights shall so have vested in the holders of
shares of the Junior Preferred Stock who are entitled to vote in such manner,
the Secretary of the Corporation may, and upon the written request of the
holders of record of not less than seventy-five percent (75%) of the outstanding
shares of Junior Preferred Stock, addressed to him at the principal office of
the Corporation, shall, call a special meeting of the holders of shares of the
Junior Preferred Stock who are entitled to vote in such manner for the election
of the directors to be elected by them, such meeting to be held within ten (10)
days after the earlier of such call or
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the delivery of such request and at the place and upon the notice provided by
the By-laws of the Corporation for the holding of meetings of shareholders,
except that the Secretary of the Corporation shall not be required to call such
a special meeting if the request for such call is received less than forty-five
(45) days prior to the date fixed for the next annual meeting of shareholders.
5. Consolidation, Merger, Etc. In case the Corporation shall enter into an
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Junior Preferred
Stock shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
one hundred (100) times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount (as such amount may
have been previously adjusted by reason of the prior occurrence(s) of any such
events) by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
6. Reacquired Shares. Any shares of Junior Preferred Stock purchased or
otherwise acquired by the corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of preferred stock and
may be reissued as part of a new series of preferred stock to be created by
amendment of the Certificate of Incorporation adopted by resolution of the Board
of Directors, subject to the conditions and restrictions on issuance set forth
herein.
7. Preemptive Rights. The holders of shares of the Junior Preferred Stock
shall not have any preemptive right to subscribe for or purchase any shares of
stock or any other securities which may be issued by the Corporation.
8. No Redemption. The shares of Junior Preferred Stock shall not be
redeemable.
9. Amendment. Without the consent of the holders of at least seventy-five
percent (75%) of the shares of Junior Preferred Stock at the time outstanding,
either in writing or by vote at a meeting called for that purpose at which the
holders of the Junior Preferred Stock shall vote as a class, neither the
Certificate of Incorporation nor any resolution of the Board of Directors
establishing and designating a series of preferred stock and determining the
relative rights and preferences thereof shall be changed so as to alter in an
adverse manner the designations, preferences, limitations and rights of holders
of the Junior Preferred Stock.
10. Fractional Shares. The Junior Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Junior Preferred Stock.
11. Exclusion of Other Rights. Except as may otherwise be required by law,
the shares of Junior Preferred Stock shall not have any designations,
preferences, limitations or relative rights, other than those specifically set
forth in the Certificate of Incorporation.
12. Headings of Subdivisions. The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
13. Severability of Provisions. If any right, preference or limitation of
the Junior Preferred Stock set forth in this resolution (as such resolution may
be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other rights,
preferences and limitations set forth in this Paragraph (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so
expressed herein.
A-7
(Agco Logo)
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, 2002
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 15, 2002 at the Annual Meeting of
Stockholders of AGCO Corporation to be held at the offices of the Company, 4205
River Green Parkway, Duluth, Georgia 30096, at 9:00 a.m., local time, on
Thursday, April 25, 2002, 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: Wolfgang Deml, Anthony D. Loehnis and David E. Momot
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below.
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2. Approve the Amended and Restated Certificate of Incorporation of AGCO
Corporation.
[ ] 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.
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Signature
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Signature, if held jointly
Dated: , 2002
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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.