<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] 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 Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
AGCO CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(AGCO LOGO)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1999
The Annual Meeting of Stockholders of AGCO Corporation will be held at the
offices of the Company, 4205 River Green Parkway, Duluth, Georgia 30096 on
Wednesday, April 28, 1999, at 9:00 a.m., local time, for the following purposes:
1. To elect four directors to serve for the ensuing three years or
until their successors have been duly elected and qualified; and
2. 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 10, 1999 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting. During the period from April 18, 1999 until the annual
meeting, a list of stockholders as of the close of business on March 10, 1999
will be available at the location of the meeting, for examination during normal
business hours by any stockholder.
WE URGE YOU TO MARK AND EXECUTE YOUR PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. IN THE EVENT YOU ARE ABLE TO ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
ROBERT J. RATLIFF
Chairman of the Board
Atlanta, Georgia
March 31, 1999
<PAGE> 3
ACGO CORPORATION
------------------------------------
PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1999
------------------------------------
INFORMATION REGARDING PROXIES
This proxy solicitation is made by the Board of Directors (the "Board of
Directors" or the "Board") of AGCO Corporation (the "Company"), which has its
principal executive offices at 4205 River Green Parkway, Duluth, Georgia 30096.
By signing and returning the enclosed proxy card, you authorize the persons
named on the proxy card to represent you and vote your shares.
If you attend the meeting, you may vote by ballot. If you are not present
at the meeting, your shares can be voted only when represented by proxy. You may
indicate a vote for or against the proposal on the proxy card and your shares
will be voted accordingly. If you indicate a preference to abstain on the
proposal, no vote will be recorded. You may withhold your vote from any nominee
for director by writing his name in the appropriate space on the proxy card. You
may cancel your proxy before balloting begins by notifying the Corporate
Secretary in writing at 4205 River Green Parkway, Duluth, Georgia 30096. In
addition, any proxy signed and returned by you may be revoked at any time before
it is voted by signing and duly delivering a proxy bearing a later date or by
attendance at the meeting and voting in person. If you return a signed proxy
card that does not indicate your voting preferences, the persons named on the
proxy card will vote your shares in favor of all of the items set forth in the
attached notice.
The enclosed form of proxy is solicited by the Board of Directors of the
Company and the cost of solicitation of proxies will be borne by the Company. In
order to ensure that a quorum is represented by proxies at the meeting, proxy
solicitation may also be made personally or by telephone or telegram by officers
or employees of the Company, without added compensation. The Company will
reimburse brokers, custodians and nominees for their expenses in sending proxies
and proxy material to beneficial owners. The Company may retain an outside firm
to aid in the solicitation of proxies for fees which the Company expects would
not exceed $25,000.
This proxy statement and form of proxy are first being sent to stockholders
on or about March 31, 1999. The Company's 1998 Annual Report to its stockholders
is 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 10, 1999
will be entitled to notice of and to vote at the annual meeting to be held on
April 28, 1999 (the "Annual Meeting"). On March 10, 1999, the Company had
outstanding 59,535,921 shares of Common Stock, par value $.01 per share (the
"Common Stock"), each of which is entitled to one vote on each matter coming
before the meeting. No cumulative voting rights are authorized, and dissenters'
rights for stockholders are not applicable to the matters being proposed.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspector of elections appointed for the meeting who will also determine
whether a quorum is present for the transaction of business. The Company's
Bylaws provide that a quorum is present if a majority of the outstanding shares
of Common Stock of the Company entitled to vote at the meeting are present in
person or represented by proxy. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining whether a quorum is
present. Shares held by nominees for beneficial owners will be counted for
purposes of determining whether a quorum is present if the nominee has the
discretion to vote on at least one of the matters presented even if the nominee
may not exercise discretionary voting power with respect to other matters and
voting instructions have not been received from the beneficial owner (a "broker
non-vote"). With
<PAGE> 4
respect to any matter (other than the election of directors) that may properly
come before the meeting for stockholder consideration, abstentions will be
counted in determining the minimum number of affirmative votes required for
approval of any matter presented for stockholder consideration and, accordingly,
will have the effect of a vote against any such matter. Broker non-votes will
not be counted as votes for or against matters presented for stockholder
consideration.
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
Currently, the Company's Board of Directors has fixed the number of
directors at eleven. The Board is divided into three classes of directors,
designated Class I, Class II and Class III, with each class as nearly equal in
number as possible to the other two classes. The three classes serve staggered
three-year terms. Stockholders annually elect directors of one of the three
classes to serve for three years or until their successors have been duly
elected and qualified. At the Annual Meeting, stockholders will elect four
directors to serve as Class I directors. The Governance Committee has
recommended, and the Board of Directors has nominated, the four individuals
named below to serve as Class I directors until the annual meeting in 2002 or
until their successors have been duly elected and qualified.
The following is a brief description of the business experience of each
nominee.
HAMILTON ROBINSON, age 64, has been a Director of the Company since June
1990 and was Chairman of the Board of Directors of the Company from September
1990 to August 1993. From 1984 until April 1997, Mr. Robinson was Managing
Director of Hamilton Robinson & Company, Incorporated, a private institutional
equity manager. Since April 1997, Mr. Robinson has been a private investor.
ANTHONY D. LOEHNIS, age 63, 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 Marketing Limited
subsidiary since December 1995. Mr. Loehnis also has served as Non-Executive
Director of Tokyo-Mitsubishi International plc since April 1996 and Alpha Bank
London Limited since November 1994. 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.
JOHN M. SHUMEJDA, age 53, has been a Director of the Company since February
1999. He has been Chief Executive Officer and President for the Company since
February 1999. He served as President and Chief Operating Officer for the
Company from January 1998 to February 1999 and Executive Vice President,
Technology and Manufacturing from February 1997 to January 1998. Mr. Shumejda
was President, Corporate Operations and Technology from August 1996 to February
1997, Executive Vice President, Technology and Development from January 1996 to
August 1996, Executive Vice President and Chief Operating Officer from January
1993 to January 1996, Senior Vice President -- Operations from October 1991 to
January 1993, Senior Vice President -- Combine Operations from May 1991 to
October 1991 and Vice President -- Combine Operations from June 1990 to May
1991.
WOLFGANG DEML, age 53, has been a Director of the Company since March 1999.
Since July 1991, Mr. Deml has been President and Chief Executive Officer of
BayWa Corporation, a trading and services company located in Munich, Germany.
Mr. Deml is also currently Vice President of the German Raiffeisen Organization;
Executive Officer of the Australian 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; and a member of
the Supervisory Board of the Landwirtschaftliche Rentenbank Frankfurt.
Each of these nominees has indicated a willingness to serve on the Board of
Directors of the Company. If any of the nominees shall become unable to serve,
or for good cause will not serve, the persons named on the enclosed proxy card
may exercise their discretion to vote for any substitute nominee or nominees
proposed by the Board of Directors. The Company's Bylaws provide that
nominations from the floor of persons other than the nominees proposed by the
Board of Directors will not be accepted unless the stockholder has provided
certain information concerning proposed nominees to the Company in writing no
later than sixty days and no
2
<PAGE> 5
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 four nominees who receive the greatest number of votes cast for the
election of directors at the meeting shall become directors at the conclusion of
the tabulation of votes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH ABOVE.
DIRECTORS CONTINUING IN OFFICE
The seven individuals named below are now serving as Directors of the
Company with terms expiring at the annual meetings in 2000 and 2001, as
indicated.
Directors who are continuing in office as Class II directors whose terms
expire at the annual meeting in 2000 are listed below.
HENRY J. CLAYCAMP, age 68, has been a Director of the Company since June
1990. Mr. Claycamp has been President of MOSAIX Associates, a management
consulting firm, since 1985. From 1973 to 1982, Mr. Claycamp was Vice
President -- Corporate Planning and Vice President -- Corporate Marketing for
International Harvester Company. Previously, Mr. Claycamp held professorial
positions at Stanford University, Purdue University and the Massachusetts
Institute of Technology.
RICHARD P. JOHNSTON, age 68, has been a Director of the Company since June
1990. Mr. Johnston is Chairman of the Executive Committee of Royal Precision
Corporation, a golf component manufacturer, and a director of Myers Industries,
Inc., a material handling products manufacturing company. Mr. Johnston was
Chairman of the Board of Republic Realty Mortgage Corporation, a commercial
mortgage banking company, from January 1993 to January 1995. From 1976 to 1998,
Mr. Johnston was Chairman of the Board of Merbanco Inc., a private equity
investor.
WOLFGANG SAUER, age 69, 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.,
Coca-Cola Industries Ltda., Hannover Seguros S.A., Xerox do Brasil S.A.,
Carborundum S.A., Atlas Copco do Brasil Ltda., Icatu Holding, WTC-World Trade
Center -- Sao Paulo and the Council of Brazil-German Chambers of Industry and
Commerce. From 1970 to March 1987, Dr. Sauer served as President and Chief
Executive Officer of Volkswagon for their operations in Argentina and Brazil and
served as President and Chief Executive Officer of the Ford-Volkswagon
joint-venture, Autolatina, in such countries from March 1987 to November 1990.
In February 1998, Dr. Sauer was designated Ambassador Extraordinary and
Plenipotentiary of the Sovereign Military Order of Malta for Brazil.
Directors who are continuing in office as Class III Directors whose terms
expire at the annual meeting in 2001 are listed below.
WILLIAM H. FIKE, age 62, has been a Director of the Company since April
1995. Mr. Fike has been Vice Chairman and Executive Vice President of Magna
International, Inc. since September 1994. He is presently serving as a director
of Terex Corporation. From 1965 to 1994, Mr. Fike held several managerial
positions at Ford Motor Company, including Corporate Vice President and
President -- Ford of Europe, Executive Director of Ford Mexico Automotive and
North American Trim Operations and President -- Ford of Brazil.
GERALD B. JOHANNESON, age 58, 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.
ALAN S. MCDOWELL, age 60, has been a Director of the Company since June
1990. Mr. McDowell is also a director of Buffets, Inc. Mr. McDowell has been a
private investor since 1983.
3
<PAGE> 6
ROBERT J. RATLIFF, age 67, has been 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 1998, the Board of Directors held nine meetings. Each nonemployee
director receives a retainer fee of $20,000 per annum, $1,000 for each Board
meeting attended and $1,000 for each committee meeting attended. Committee
chairmen receive an additional fee of $500 for each committee meeting attended.
The Company also pays Mr. Fike an annual fee in lieu of the retainer fee of
$150,000 as compensation for serving as Chairman of the Executive Committee of
the Board. The Company also pays Mr. Claycamp an annual fee of $120,000 for
serving as a marketing consultant to the Company. In addition to the above fees,
the Company reimburses each director for 50% of the fees paid by the director
for personal estate planning consulting by third parties. Directors who are
employees of the Company are not paid any fees or additional remuneration for
service as members of the Board or its committees.
NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
At the 1995 annual meeting, the stockholders approved the AGCO Corporation
Nonemployee Director Stock Incentive Plan (the "Director Plan"), effective
December 14, 1994, which was amended by the stockholders at the 1996 annual
meeting. Pursuant to the Director Plan, each nonemployee director is awarded the
right to receive shares of Common Stock which can be earned during the three
year performance period in effect for that participant. The Director Plan
requires stock appreciation to earn awards. The awarded shares are earned in
increments for each 15% increase in the average stock price (with the average
calculated over 20 consecutive trading days) over the base price (the fair
market value of the stock at the time the shares are awarded). The stock price
must increase 60% in a three year period for the full allocation to be earned.
When an increment of the award is earned, the shares are issued in the form of
restricted stock, which vests 12 months after the last day of the three year
performance period. In the event a director departs from the Board of Directors
for any reason, all earned awards vest. If the awarded shares are not fully
earned before the end of the three year performance period or before the
participant's departure from the Board of Directors for any reason, whichever
comes first, any unearned awards are forfeited. The ultimate value of the
restricted stock is determined by the stock price at the end of the vesting
period. When the restricted shares are earned, a cash payment designed to
satisfy a portion of the federal and state income tax obligations is paid by the
Company to each participant. The tax payment is provided to remove the necessity
for the nonemployee director to sell a significant portion of the stock earned
under the Director Plan to pay taxes.
As of March 10, 1999, each of Messrs. Claycamp, Fike, Johanneson, Johnston,
McDowell and Robinson had earned 3,500 shares under the Director Plan and had
4,500 shares that had been awarded but not earned. Messrs. Loehnis and Sauer
each have been awarded 4,000 shares under the Director Plan, none of which are
earned.
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 seven
meetings in 1998 and is currently composed of Messrs. Claycamp, Fike,
Johanneson, Johnston, Ratliff and Robinson.
4
<PAGE> 7
The Audit Committee's functions are to recommend for appointment by
the Board of Directors a firm of independent certified public accountants
to act as auditors for the Company and to meet with the auditors to review
the scope, preparation and results of the Company's audits, to review the
Company's internal accounting and financial controls and to consider other
matters relating to the financial reporting process and safeguarding of the
Company's assets. The Audit Committee held five meetings in 1998 and is
currently composed of Messrs. Loehnis, McDowell, Robinson and Sauer.
The Compensation Committee's functions are to review, approve,
recommend and report to the chief executive officer and the Board of
Directors matters regarding the compensation of the Company's chief
executive officer and other key executives, compensation levels or plans
affecting the compensation of the Company's other employees and
administration of the Company's Management Incentive Compensation Plan, the
1991 Stock Option Plan, the Long-Term Incentive Plan and the Director Plan.
The Compensation Committee held eight meetings in 1998 and is currently
composed of Messrs. Fike, Johnston, Loehnis and McDowell.
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 three meetings in 1998 and is currently composed
of Messrs. Claycamp, Fike, McDowell and Sauer.
The Strategic Planning Committee's function is to oversee the
Company's strategic planning process and to ensure that the Company's
purpose and direction are defined. The Strategic Planning Committee reviews
the corporate goals and objectives established by executive management and
oversees the annual planning process by ensuring that the functional plan
supports the corporate goals and objectives. The Strategic Planning
Committee held three meetings in 1998 and is currently composed of Messrs.
Fike, Johanneson, Ratliff and Sauer.
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 five meetings in 1998 and is currently composed of
Messrs. Claycamp, Johanneson, Johnston and Robinson.
During fiscal 1998, each director attended at least 75% of the aggregate of
the number of meetings of the Board and respective committees on which he served
while a member thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1998, Messrs. Fike, Johnston, Loehnis and McDowell 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 1998.
5
<PAGE> 8
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
action at the meeting other than the election of directors. If any other
business should properly come before the meeting, the persons named in the
accompanying form of proxy intend to vote thereon in accordance with their best
judgment.
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth certain information as of March 10, 1999
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.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS(1)
- ------------------- ------------- --------
<S> <C> <C>
Franklin Resources, Inc.(2)................................. 8,624,680 14.5%
777 Mariners Island Boulevard
San Mateo, California 94404
</TABLE>
- ---------------
(1) Based on 59,535,921 shares of Common Stock outstanding on March 10, 1999.
(2) The shares listed as beneficially owned by Franklin Resources, Inc. ("FRI")
are the total number of shares held as of December 31, 1998 in its capacity
as the parent holding company of Templeton Global Advisors Limited ("TGAL"),
Templeton Investment Management Limited ("TIML") and Templeton Investment
Counsel, Inc. ("TICI"). Such shares are deemed to be beneficially owned by
Charles B. Johnson and Rupert H. Johnson, Jr., each of whom is a principal
shareholder of FRI. 8,578,580 of such shares are beneficially owned by TGAL
and are the total number of shares held by TGAL as of December 31, 1998 in
its capacity as investment advisor. TGAL has sole voting power and
dispositive power with respect to all of the 8,578,580 shares deemed to be
beneficially owned by it, and each of TIML and TICI has sole voting power
and dispositive power with respect to all of the shares deemed to be
beneficially owned by it. The 8,624,680 shares beneficially owned by FRI,
Charles B. Johnson and Rupert H. Johnson, Jr. include 42,000 shares
beneficially held by TIML as of December 31, 1998 in its capacity as
investment advisor and 4,100 shares beneficially held by TICI as of December
31, 1998 in its capacity as investment advisor. The information regarding
FRI, TGAL, TIML, TICI, Charles B. Johnson and Rupert H.. Johnson, Jr. is
presented in reliance upon a Schedule 13G filed by them with the Commission
on or about January 27, 1999.
6
<PAGE> 9
The following table sets forth certain information as of March 10, 1999
with respect to the beneficial ownership of the Company's Common Stock by the
Company's directors, the Chairman and Chief Executive Officer of the Company
during 1998 and the other four most highly compensated executive officers of the
Company during such period and all executive officers and directors as a group.
Unless otherwise indicated in the footnotes, each such individual has sole
voting and investment power with respect to the shares set forth in the table.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP PERCENT OF
NAME OF BENEFICIAL OWNER (1)(2)(3) CLASS(4)
- ------------------------ ---------- ----------
<S> <C> <C>
Robert J. Ratliff(5)........................................ 806,202 1.4%
Henry J. Claycamp........................................... 21,048 *
Wolfgang Deml............................................... -- *
William H. Fike............................................. 8,500 *
Gerald B. Johanneson........................................ 8,500 *
Richard P. Johnston(6)...................................... 109,500 *
Anthony Loehnis............................................. 3,000 *
Alan S. McDowell(7)......................................... 60,656 *
Hamilton Robinson(8)........................................ 27,554 *
Wolfgang Sauer.............................................. -- *
John M. Shumejda............................................ 362,093 *
James M. Seaver............................................. 225,013 *
Edward R. Swingle........................................... 186,728 *
Chris E. Perkins............................................ 55,100 *
All executive officers and directors as a group (30
persons).................................................. 2,663,593 4.5%
</TABLE>
- ---------------
* Less than one percent.
(1) Includes shares which may be purchased upon exercise of options which are
exercisable as of March 10, 1999 or become exercisable within 60 days
thereafter, for the following individuals: Mr. Fike -- 4,000; Mr.
Johanneson -- 5,000; Mr. Perkins -- 17,100; Mr. Ratliff -- 9,000; executive
officers and directors as a group -- 118,263.
(2) Includes the following numbers of unvested restricted shares of the
Company's Common Stock earned under the Long-Term Incentive Plan by the
following individuals: Mr. Shumejda -- 233,583; Mr. Seaver -- 151,667; Mr.
Swingle -- 105,833; Mr. Perkins -- 33,333; all executive officers and
directors as a group -- 1,018,166.
(3) Includes the following numbers of restricted shares of the Company's Common
Stock earned under the Director Plan by the following individuals: Mr.
Claycamp -- 1,500; Mr. Fike -- 3,500; Mr. Johanneson -- 3,500; Mr.
Johnston -- 1,500; Mr. McDowell -- 1,500, Mr. Robinson --1,500; all
executive officers and directors as a group -- 13,000.
(4) Any securities not outstanding which are subject to options which are
exercisable as of March 10, 1999 or become exercisable within 60 days
thereafter are deemed outstanding for the purpose of computing the
percentage of outstanding securities of the class owned by any person
holding such securities but are not deemed outstanding for the purpose of
computing the percentage of the class owned by any other person. Based on
59,535,921 shares of Common Stock outstanding on March 10, 1999.
(5) Includes 2,742 shares of Common Stock owned by Mr. Ratliff's wife, 200,000
shares of Common Stock beneficially owned by Mr. Ratliff as trustee of the
Robert J. Ratliff Charitable Remainder Unitrust and 568,360 shares of Common
Stock owned by a family limited partnership of which Mr. Ratliff controls
the general partner. Mr. Ratliff disclaims beneficial ownership of these
shares.
(6) Includes 57,756 and 48,244 shares of Common Stock beneficially owned by Mr.
Johnston as trustee of the Johnston Family Unitrust #1 and Johnston Family
Unitrust #2, respectively, and 3,500 shares of Common Stock beneficially
owned by RPJ/JAJ Partners, Ltd.
7
<PAGE> 10
(7) Includes 7,156 shares of Common Stock held in trust for the benefit of Mr.
McDowell's children as to which Mr. McDowell disclaims beneficial ownership
and 50,000 shares of Common Stock owned by a family limited partnership of
which Mr. McDowell is the general partner as to which Mr. McDowell disclaims
beneficial ownership.
(8) Includes 1,000 shares of Common Stock owned by Mr. Robinson's wife as to
which Mr. Robinson disclaims beneficial ownership.
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 1998, 1997
and 1996, the cash and noncash compensation paid to or earned by Robert J.
Ratliff, who served as Chairman and Chief Executive Officer during 1998, and the
four other most highly compensated executive officers of the Company during such
period (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
---------------------------------------------- ------------
OTHER ANNUAL RESTRICTED ALL OTHER
NAME AND COMPENSATION STOCK AWARDS COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS($)(1) ($)(2) ($)(3) ($)(4)
------------------ ---- ---------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Ratliff -- 1998 $1,000,000 $ -- $ -- $ -- $255,957
Chairman 1997 1,000,000 -- 1,052,088 1,731,250 171,515
1996 1,000,000 -- 4,041,650 1,816,313 201,279
John M. Shumejda -- 1998 395,842 88,273 848,484 -- 159,393
President and Chief 1997 350,000 292,613 274,491 1,592,750 131,246
Executive Officer 1996 350,000 376,617 -- 1,671,008 121,703
James M. Seaver -- 1998 322,500 71,918 441,002 -- 102,982
Senior Vice President, 1997 297,917 249,059 144,469 1,315,750 86,601
Worldwide Sales 1996 247,925 266,767 -- 1,380,398 92,438
Edward R. Swingle -- 1998 213,786 42,223 438,643 -- 42,563
Senior Vice President, 1997 190,469 67,807 201,904 554,000 31,461
Worldwide Marketing 1996 182,342 68,925 26,162 581,220 30,704
Chris E. Perkins -- 1998 212,000 47,276 27,067 -- 17,577
Vice President, 1997 183,333 153,266 -- 554,000 11,368
Worldwide Parts 1996 150,000 63,450 -- 581,220 8,805
</TABLE>
- ---------------
(1) For Messrs. Shumejda, Seaver, Swingle and Perkins, bonus includes payments
of bonuses earned under the Company's Management Incentive Compensation Plan
which are made in the subsequent fiscal year. Under the terms of Mr.
Ratliff's employment contract, effective August 15, 1995, Mr. Ratliff no
longer participates in the Company's Management Incentive Compensation Plan.
(2) Other Annual Compensation includes cash payments made pursuant to the terms
of the Amended and Restated Long-Term Incentive Plan (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.
Ratliff -- $692,500 in 1997 and $3,756,438 in 1996; Mr. Shumejda -- $793,584
in 1998 and $274,491 in 1997; Mr. Seaver -- $441,002 in 1998 and $144,469 in
1997; Mr. Swingle -- $403,786 in 1998 and $144,469 in 1997; and Mr.
Perkins -- $27,067 in 1998. Other Annual Compensation for Mr. Ratliff in
1997 also includes underwriting expenses and a related tax equalization
payment paid by the Company in the amount of $236,064 incurred in connection
with Mr. Ratliff's sale of 200,000 shares of Common Stock as part of the
Company's sale of 5.2 million shares of Common Stock in March 1997 and
estate planning consulting by third parties in 1997 totaling $217,336. Other
Annual Compensation for Mr. Shumejda in 1998 also includes the benefit
8
<PAGE> 11
for personal use of an airplane and automobile leased by the Company in the
amount of $54,900. Other Annual Compensation for Mr. Swingle also includes
relocation expenses and a related tax equalization payment in the amount of
$30,471 and $47,995 for 1998 and 1997, respectively, and estate planning
consulting by third parties totaling $18,088 in 1996.
(3) Restricted Stock Awards represents the value as of the date restricted
shares of Common Stock of the Company were earned pursuant to the LTIP. At
December 31, 1998, the number and value of the aggregate shares of
restricted Common Stock earned and beneficially held by each of the
participants named above pursuant to the LTIP were as follows: Mr. Shumejda,
243,083 shares with a value of $1,914,279; Mr. Seaver, 156,667 shares with a
value of $1,233,753; Mr. Swingle, 110,833 shares with a value of $872,810
and Mr. Perkins, 33,333 shares with a value of $262,497. Awards earned under
the LTIP by Mr. Ratliff have all vested.
(4) All Other Compensation for 1998 includes the following: (i) the value of the
benefit to the executive officer for life insurance policies funded by the
Company as follows: Mr. Ratliff -- $223,673; Mr. Shumejda -- $100,784; Mr.
Seaver -- $53,718; Mr. Swingle -- $7,001, and Mr. Perkins -- $11,200, (ii)
contributions to the Company's 401(k) Savings Plan in the amount of $4,800
for Messrs. Ratliff, Shumejda, Seaver, Swingle and Perkins, and (iii)
contributions to the Company's deferred compensation plan as follows: Mr.
Ratliff -- $27,484; Mr. Shumejda -- $53,809; Mr. Seaver -- $44,464; Mr.
Swingle -- $30,762 and Mr. Perkins -- $1,577, including interest with
respect to such deferred compensation which exceeded 120% of the applicable
federal long-term rate provided under Section 1274(d) of the Internal
Revenue Code.
STOCK OPTIONS
The Company did not grant any stock options pursuant to the Company's 1991
Stock Option Plan during the fiscal year ended December 31, 1998 to any of the
Named Executive Officers.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options
exercised during the last fiscal year and the unexercised options held as of the
end of the fiscal year under the Company's Option Plan for the Named Executive
Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998 AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1998(#) DECEMBER 31, 1998($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Ratliff........... $-- $-- 9,000 -- $48,375 $--
John M. Shumejda............ -- -- -- -- -- --
James M. Seaver............. -- -- -- -- -- --
Edward R. Swingle........... -- -- -- -- -- --
Chris E. Perkins............ -- -- 17,100 -- 3,413 --
</TABLE>
- ---------------
(1) Based on the market price of the Company's Common Stock on December 31, 1998
($7.875), less the exercise price of "in-the-money" options.
EMPLOYMENT CONTRACTS
The Company has entered into employment contracts with Messrs. Ratliff,
Shumejda, Seaver, Swingle and Perkins. The employment contracts provide for base
salaries at the following rates per annum: Mr. Ratliff -- $1,000,000; Mr.
Shumejda -- $460,000; Mr. Seaver -- $345,000; Mr. Swingle -- $248,000; and Mr.
Perkins -- $224,000. Mr. Ratliff's contract, dated August 15, 1995, is for an
eight year term. See "Compensation of the Chairman of the Board and Chief
Executive Officer" under the heading "Compensation Committee Report on Executive
Compensation" for additional details on Mr. Ratliff's contract.
9
<PAGE> 12
Mr. Shumejda's contract, dated January 1, 1996, and Mr. Seaver's contract, dated
February 1, 1996, are for a ten year and five year term, respectively. Mr.
Swingle's and Mr. Perkins's employment contracts are for a three year term which
currently expires in 2001. Mr. Swingle's and Mr. Perkins's contracts each
contain annual automatic one year extensions unless the Company gives written
notification to the contrary.
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 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 REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPH THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR
INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
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 of the Board, the Chief Executive Officer
and each of the other executive officers as well as directors of the Company.
The Compensation Committee also, in conjunction with the Board, reviews
compensation policies applicable to executive officers as well as directors and
considers the relationship of corporate performance to that compensation. The
Compensation Committee has available to it an outside compensation consultant
and access to independent compensation data.
EXECUTIVE OFFICER COMPENSATION POLICIES
The objectives of the Company's executive compensation program are to:
- Support the achievement of desired Company performance.
- Provide compensation that will attract and retain superior talent and
reward performance.
- Align the executive officers' interests with the success of the Company
by placing a portion of compensation at risk with payout being dependent
upon corporate performance and appreciation in the price of the Company's
Common Stock.
Effective January 1, 1994, Section 162(m) of the Internal Revenue Code was
enacted to disallow a corporate deduction for compensation in excess of
$1,000,000 per year per individual paid to the Company's Chief Executive Officer
and the other four most highly compensated officers, unless certain requirements
are met. To the extent compensation is "performance-based", as defined by the
Internal Revenue Code, it is excluded from compensation subject to the
$1,000,000 cap on tax deductibility. The Committee's policy is to design and
administer the Company's executive officer compensation program to comply with
Section 162(m)
10
<PAGE> 13
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 of the Board and Chief Executive Officer during
1998 and the other four most highly compensated officers during such period 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, 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. The corporate objectives are
set at the beginning of each year and must comprise at least 50% of the
individual's objectives, with Messrs. Shumejda, Seaver and Perkins' objectives
for the year-ended December 31, 1998 based entirely upon corporate performance.
For the year ended December 31, 1998, the corporate objectives under the
Management Incentive Compensation Plan were based on achieving targets for net
sales, pretax income and operating cash flow. Personal performance objectives
represent specific individual performance criteria agreed upon by the individual
and the Chief Executive Officer. Incentive compensation bonus opportunities are
expressed as percentages of the executive officers' base salaries. Each
executive officer's award was reviewed and approved by the Compensation
Committee. Effective August 15, 1995, pursuant to the terms of Mr. Ratliff's
amended employment contract, Mr. Ratliff's participation in the Management
Incentive Compensation Plan was discontinued.
The incentive compensation under the Management Incentive Compensation Plan
is variable and the Compensation Committee believes it is closely tied to
corporate and individual performance in a manner that encourages continuing
focus on maintaining profitability and building stockholder value.
11
<PAGE> 14
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 Amended and Restated 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) and continued employment requirements 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. When an increment of the share allocation
is earned, it is awarded in the form of restricted stock which generally carries
a five-year vesting period. Shares earned under the LTIP will immediately vest
prior to the end of the vesting period in the event of a change of control (as
defined in the LTIP).
The ultimate value of the restricted stock is determined by the stock price
at the end of the vesting period. During the vesting period, the earned awards
of restricted stock generally are forfeitable upon voluntary termination of
employment prior to age 65 or upon termination of employment by the Company for
"cause" (as defined in the LTIP). Thus, the LTIP requires stock price
appreciation to earn awards, the earned awards are forfeitable over the vesting
period, and the actual value of the award is determined by the stock price at
the end of the vesting period. During the vesting period, participants receive
dividends on their restricted shares and have full voting rights, but they may
not sell, transfer, pledge or otherwise dispose of such shares, provided,
however, that during the vesting period participants may transfer all or any
portion of their restricted shares to a revocable living trust primarily for the
benefit of a participant, an irrevocable trust in which the participant is the
settlor, or a partnership in which the participant is a general partner or a
partnership in which the participant controls the general partner. When the
restricted shares vest, a cash payment designed to satisfy a portion of the
federal and state income tax obligations which are then payable is paid by the
Company to each participant. The tax payment is provided to remove the necessity
for the executive to sell a significant portion of the stock earned under the
LTIP to pay taxes. The value of the tax payments is considered in determining
the appropriate size of the participant's share allocations.
Stock Option Program
The Company maintains the AGCO Corporation 1991 Stock Option Plan (the
"Option Plan") as a long-term incentive for key employees and consultants who do
not participate in the LTIP. The objectives of the Option Plan are 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 qualified 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
12
<PAGE> 15
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.
Deferred Compensation Plan
The Company maintains a Deferred Compensation Plan for executive officers.
The Company sets aside for Messrs. Shumejda, Seaver and Swingle an additional
2 1/2% of each such executive's salary plus interest on the outstanding balance
at 2% above the long-term bond index rate for each fiscal quarter during the
term of the senior executive's employment agreement. In addition, the Company
contributes amounts equal to 3% of the portion of the executive officer's base
salary which exceeds $160,000. The plan allows all executive officers to defer a
portion of their compensation which will earn interest at 2% above the long-term
bond index rate. The individuals are entitled to receive the total amount of
deferred compensation at the earlier of the end of the term of each of their
employment contracts or the termination of their employment with the Company.
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.
Compensation of the Chairman of the Board and Chief Executive Officer
Mr. Ratliff served as Chairman of the Board and Chief Executive Officer
until February 1999 and continues to serve as Chairman under an employment
contract dated August 15, 1995, which was approved by the Compensation and
Executive Committees of the Board of Directors. Under the employment contract,
Mr. Ratliff's compensation is principally comprised of a base salary and
restricted stock awards which are tied to stock performance. Mr. Ratliff's total
compensation was evaluated in comparison to a peer group of companies of similar
size, complexity and performance.
The employment contract provides Mr. Ratliff with a base salary of
$1,000,000 per annum. The base salary reflects the discontinuance of Mr.
Ratliff's participation in the Company's Management Incentive Compensation Plan
and recognition of the Company's past performance and growth. Under Mr.
Ratliff's leadership, the Company has grown substantially and established itself
as one of the largest manufacturers and distributors of agricultural equipment
in the world.
In July 1995, Mr. Ratliff was granted 250,000 contingent shares which could
be earned under the LTIP during a five-year performance period. Mr. Ratliff has
earned 112,500 shares under the July 1995 grant as a result of the Company's
average common stock price (with the average calculated over 20 consecutive
trading days) appreciating 60% over the established base price of $20.33. The
value of such shares on the date such shares are earned is reflected as a
restricted stock award in the Summary Compensation Table on page 8 of this Proxy
Statement. For the remaining shares under the July 1995 grant to be fully earned
by Mr. Ratliff, the stock price must reach an average of $40.67 for a 20-day
period. Under the terms of Mr. Ratliff's employment contract, all restricted
shares earned by Mr. Ratliff pursuant to the LTIP became fully vested when Mr.
Ratliff reached age 65 and all future shares earned under the LTIP will vest
immediately.
In February 1999, Mr. Shumejda was named Chief Executive Officer. Under the
terms of Mr. Shumejda's employment contract dated January 1, 1996, Mr.
Shumejda's compensation is principally comprised of a base salary of $460,000
per annum, participation in the Management Incentive Compensation Plan and
restricted stock awards pursuant to the LTIP. Mr. Shumejda's total compensation
is based on a
13
<PAGE> 16
comparison to a peer group of companies with similar size, complexity and
performance. In July 1995, Mr. Shumejda was granted 230,000 contingent shares
which could be earned under the LTIP during a five-year performance period. Mr.
Shumejda has earned 103,500 shares under the July 1995 grant. For the remaining
shares under the July 1995 grant to be earned, the stock price must reach an
average of $40.67 for a 20-day period. All shares earned by Mr. Shumejda under
the LTIP carry a five-year vesting period.
In 1998, the Company made contributions to life insurance policies on
behalf of Mr. Ratliff and Mr. Shumejda. The value of the benefit related to such
policies was estimated to be $223,673 and $100,784, respectively, and is
included in the All Other Compensation column in the Summary Compensation Table
on page 8 of this Proxy Statement.
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.
Compensation Committee
Richard P. Johnston, Chairman
William H. Fike
Anthony D. Loehnis
Alan S. McDowell
14
<PAGE> 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
<TABLE>
<CAPTION>
S&P
MEASUREMENT PERIOD AGCO S&P MID- MACHINERY-
(FISCAL YEAR COVERED) CORPORATION CAP 400 DIVERSIFIED
<S> <C> <C> <C>
12/93 100 100 100
3/94 104 96 106
6/94 107 93 95
9/94 147 99 102
12/94 134 96 97
3/95 146 104 107
6/95 165 113 120
9/95 200 124 112
12/95 225 126 120
3/96 211 134 138
6/96 245 138 138
9/96 225 142 148
12/96 253 150 150
3/97 244 148 151
6/97 317 170 191
9/97 280 197 198
12/97 258 199 191
3/98 262 221 210
6/98 182 216 188
9/98 58 185 132
12/98 70 237 146
</TABLE>
- ---------------
* Assumes $100 invested in the Company's Common Stock as of December 31, 1993.
Assumes the investment of the same amount as of December 31, 1993 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.
15
<PAGE> 18
EXECUTIVE OFFICERS
The following table sets forth information as of March 10, 1999 with
respect to each person who is an executive officer of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
- ---- --- ---------
<S> <C> <C>
Robert J. Ratliff.................................. 67 Chairman
John M. Shumejda................................... 53 President and Chief Executive Officer
James M. Seaver.................................... 53 Senior Vice President -- Worldwide Sales
Edward R. Swingle.................................. 57 Senior Vice President -- Worldwide Marketing
Norman L. Boyd..................................... 55 Vice President -- Corporate Development
Judith A. Czelusniak............................... 41 Vice President -- Corporate Relations
Daniel H. Hazelton................................. 60 Vice President -- Parts, North America
Aaron D. Jones..................................... 53 Vice President -- Manufacturing Operations
Worldwide
Malcolm P. Lines................................... 50 Vice President -- Marketing, Europe/Africa/
Middle East
Stephen D. Lupton.................................. 54 Vice President -- Legal Services,
International
John G. Murdoch.................................... 53 Vice President -- Sales, North America
William A. Nix III................................. 47 Vice President -- Treasurer
Chris E. Perkins................................... 36 Vice President -- Worldwide Parts
Bruce W. Plagman................................... 47 Vice President -- Manufacturing
Dexter E. Schaible................................. 49 Vice President -- Engineering and
Development Worldwide
Patrick S. Shannon................................. 36 Vice President and Chief Financial Officer
Michael F. Swick................................... 53 Vice President and General Counsel
Adri Verhagen...................................... 57 Vice President -- Sales,
Europe/Africa/Middle East
Gerald A. Weaver................................... 51 Vice President -- Marketing, North America
John H. Winter..................................... 50 Vice President -- Strategic Planning
</TABLE>
For a description of Messrs. Ratliff's and Shumejda's business experience,
see "-- Directors Continuing in Office" and "Proposal Number 1, Election of
Directors," respectively.
James M. Seaver has been Senior Vice President -- Worldwide Sales for the
Company since September 1998. Mr. Seaver was 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, Americas from February 1995 to January 1996 and Vice
President -- Sales, Americas from May 1993 to February 1995.
Edward R. Swingle has been Senior Vice President -- Worldwide Marketing for
the Company since September 1998. Mr. Swingle was Vice President -- Special
Projects from July 1998 to September 1998, Vice President -- Parts, North
America from July 1996 to July 1998, Vice President -- Parts, Americas from
February 1995 to July 1996 and Vice President -- Marketing from May 1993 to
February 1995.
Norman L. Boyd has been Vice President -- Corporate Development for the
Company since November 1998. Mr. Boyd was Vice President -- Europe/Africa/Middle
East Distribution from February 1997 to
16
<PAGE> 19
November 1998, Vice President -- Marketing, Americas from February 1995 to
February 1997 and Manager -- Dealer Operations from January 1993 to February
1995.
Judith A. Czelusniak has been Vice President -- Corporate Relations for the
Company since November 1994. From March 1993 to November 1994, Ms. Czelusniak
managed the Company's external communications on a contract basis while she was
a Principal at The Dilenschneider Group, a public relations consulting company.
Daniel H. Hazelton has been Vice President -- Parts, North America for the
Company since June 1998. He served as Vice President -- Worldwide Parts for the
Company from September 1997 to June 1998 and Vice President -- Sales, North
America from February to September 1997. Mr. Hazelton was Vice
President -- Sales, North America for the Company from February 1995 to February
1997 and Vice President -- Parts from January 1992 to February 1995.
Aaron D. Jones has been Vice President -- Manufacturing Operations
Worldwide for the Company since December 1998. Mr. Jones was Vice
President -- Manufacturing and Technology for the Company from March 1998 to
December 1998, Vice President -- Global Manufacturing/Purchasing from February
1997 to March 1998, Vice President, Manufacturing from October 1995 to February
1997, Vice President -- Manufacturing, International from March 1995 to October
1995 and Director of Manufacturing, International from June 1994 to March 1995.
From April 1988 to June 1994, Mr. Jones was Managing Director of Massey Ferguson
Tractors Limited, a subsidiary of Massey Ferguson.
Malcolm P. Lines has been Vice President -- Marketing, Europe/Africa/Middle
East since September 1998. Mr. Lines was Director -- Sales, Europe/Africa/Middle
East from December 1997 to September 1998, Director -- Strategic Planning,
Europe/Africa/Middle East from June 1996 to December 1997 and General
Manager -- Massey Ferguson Germany from May 1993 to June 1996.
Steven D. Lupton has been Vice President -- Legal Services, International
for the Company since October 1995 and Director -- 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.
John G. Murdoch has been Vice President -- Sales, North America for the
Company since September 1998. Mr. Murdoch was Vice President -- North America
Distribution for the Company from February 1997 to September 1998, Vice
President -- Sales and Marketing, Europe/Africa/Middle East from October 1995 to
February 1997, Vice President -- Sales and Marketing, International from June
1994 to October 1995 and Vice President -- Massey Ferguson Operations from
January 1993 to June 1994.
William A. Nix III has been Vice President -- Treasurer for the Company
since October 1995. Mr. Nix was Director of Corporate Finance at Caraustar
Industries from September 1990 to October 1995 and was a senior manager with the
accounting firm of Arthur Andersen LLP, where he had been employed from
September 1979 to September 1990.
Chris E. Perkins has been Vice President -- Worldwide Parts for the Company
since July 1998, Vice President and Chief Financial Officer for the Company from
January 1996 to July 1998, Vice President -- Finance and Administration,
International from February 1995 to January 1996, Director of Finance and
Administration, International from June 1994 to February 1995 and
Manager -- Corporate Development from August 1993 to June 1994.
Bruce W. Plagman has been Vice President -- Manufacturing for the Company
since May 1998. He served as Vice President -- North America Sales for the
Company from September 1997 to May 1998 and Vice President, General Manager
- -- North America Operations from February to September 1997. Mr. Plagman was
Vice President -- Parts, Europe/Africa/Middle East for the Company from February
1995 to February 1997, Director of Parts, International from June 1994 to
February 1995, and Manager -- Massey Ferguson Parts Operations from January 1993
to June 1994.
Dexter E. Schaible has been Vice President -- Engineering and Product
Development Worldwide for the Company since October 1998. Mr. Schaible was Vice
President -- Worldwide Product Development for the
17
<PAGE> 20
Company from February 1997 to October 1998, Vice President -- Product
Development from October 1995 to February 1997 and Director -- Product
Development from September 1993 to October 1995.
Patrick S. Shannon has been Vice President and Chief Financial Officer
since July 1998. Mr. Shannon served as Vice President -- Corporate Finance for
the Company from January 1998 to July 1998, Vice President -- Director of
Finance, International from January 1996 to January 1998, Vice President and
Controller from February 1995 to December 1995 and Controller from June 1993 to
February 1995.
Michael F. Swick has been Vice President and General Counsel for the
Company since December 1991 and General Counsel since December 1990. Prior to
joining the Company, Mr. Swick was a partner with the law firm of Drew, Eckl &
Farnham.
Adri Verhagen has been Vice President -- Sales, Europe/Africa/Middle East
for the Company since September 1998. Mr. Verhagen was Director/General Manager,
East Asia/Pacific from October 1995 to September 1998 and Managing Director
Massey Ferguson -- Australia Ltd. from July 1979 to October 1995.
Gerald A. Weaver has been Vice President -- Marketing, North America for
the Company since September 1998. Mr. Weaver was Director -- Sales, North
America for the Company from May 1998 to September 1998 and General Marketing
Manager from March 1991 to April 1998.
John H. Winter has been Vice President -- Strategic Planning for the
Company since September 1998. From January 1998 to September 1998, Mr. Winter
served as Director, Business Development Asia/Pacific for AlliedSignal,
Electronic & Avionic Systems, a manufacturer of defense and commercial avionic
systems and from January 1996 to January 1998 as Director, Business Development
Asia/Pacific for AlliedSignal, Electronic Systems. From September 1993 to
January 1996, he served as Marketing Manager Airborne Sonar Systems at
AlliedSignal Ocean Systems.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At March 10, 1999, the Company had loans outstanding in excess of $60,000
bearing interest at 6% to the following executive officers: Robert J. Ratliff
- -- $90,000; John M. Shumejda -- $89,707; James M. Seaver -- $93,567; Norman L.
Boyd -- $166,867; Judith A. Czelusniak -- $194,988; John G. Murdoch -- $64,061;
and Michael F. Swick -- $81,915. The proceeds of the loans were used primarily
to exercise stock options.
The Company has an agreement to source certain engines for use in the
Company's Brazilian production from Iochpe-Maxion, S.A. Dr. Sauer, a director
the Company, is also a director of Iochpe-Maxion S.A.
During 1998, the Company had net sales of $109.6 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, 1998, all Section
16(a) filing requirements applicable to its directors, executive officers and
greater than ten-percent beneficial owners were properly filed, except that Ms.
Czelusniak filed one late Form 4 in December 1998 involving four transactions
with respect to the Common Stock of the Company.
18
<PAGE> 21
ANNUAL REPORT TO STOCKHOLDERS
The Company's 1998 Annual Report to Stockholders is being furnished with
this proxy material to stockholders of record as of March 10, 1999.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE 1998 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 10,
1999, PROVIDED THAT SUCH REQUEST SETS FORTH A GOOD FAITH REPRESENTATION THAT, AS
OF SUCH DATE, THE PERSON MAKING THE REQUEST WAS A BENEFICIAL OWNER OF COMMON
STOCK OF THE COMPANY. THE WRITTEN REQUEST SHOULD BE DIRECTED TO: CORPORATE
SECRETARY, AGCO CORPORATION, 4205 RIVER GREEN PARKWAY, DULUTH, GEORGIA 30096.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, a firm of independent public accountants, has been
appointed the Company's independent public accountants for the year 1999. The
appointment of auditors is approved annually by the Board of Directors. The
decision of the Board is based on the recommendation of the Audit Committee.
A representative of Arthur Andersen LLP is expected to attend the Annual
Meeting and will have the opportunity to make a statement if he or she desires
to do so. The representative will also be available to respond to appropriate
questions from stockholders.
STOCKHOLDERS' PROPOSALS
Any stockholder of the Company who wishes to present a proposal at the 2000
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 1, 1999; 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 1999 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 2000
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 27, 2000 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.
19
<PAGE> 22
(AGCO LOGO)
<PAGE> 23
PROXY AGCO CORPORATION
4205 RIVER GREEN PARKWAY
DULUTH, GEORGIA 30096
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, APRIL 28, 1999
The undersigned hereby appoints Patrick S. Shannon, Michael F. Swick and
Andrew H. Beck, 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 10, 1999 at the Annual
Meeting of Stockholders of AGCO Corporation to be held at the offices of the
Company, 4205 River Green Parkway, Duluth, Georgia 30096, at 9:00 a.m., local
time, on Wednesday, April 28, 1999, 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
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below
</TABLE>
Nominees: Hamilton Robinson, Anthony D. Loehnis,
John M. Shumejda and Wolfgang Deml.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below.
2. 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.
--------------------------------
Signatures
--------------------------------
Signature, if held jointly
Dated:
--------------------------------
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.
