SCHEDULE 14A
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 Pursuant to ss. 240.14a-11(c) or
ss. 240.14a-12
Ag-Chem Equipment Co., Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- -------------------------------------------------------------------------------
(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)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
- -------------------------------------------------------------------------------
|_| 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:
N/A
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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AG-CHEM EQUIPMENT CO., INC.
February 3, 1997
TO: THE SHAREHOLDERS OF AG-CHEM EQUIPMENT CO., INC.
You are cordially invited to attend the Annual Meeting of Shareholders
of Ag-Chem Equipment Co., Inc. to be held on Monday, March 3, 1997, at 3:00 p.m.
at the Decathlon Athletic Club, 7800 Cedar Avenue South, Bloomington, Minnesota.
I encourage you to attend. Whether or not you plan to attend the meeting, I urge
you to complete and sign the accompanying form of Proxy and return it in the
enclosed envelope. Also attached for your review are the formal Notice of
Meeting and Proxy Statement.
On behalf of your Board of Directors and employees, thank you for your
continued support of Ag-Chem Equipment Co., Inc.
Very truly yours,
/s/ Alvin E. McQuinn
Alvin E. McQuinn,
PRESIDENT, CEO, AND
CHAIRMAN OF THE BOARD
AG-CHEM EQUIPMENT CO., INC.
5720 Smetana Drive
Minnetonka, Minnesota 55343
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MARCH 3, 1997
TO: The Shareholders of Ag-Chem Equipment Co., Inc.:
The Annual Meeting of Shareholders of Ag-Chem Equipment Co., Inc. (the
"Company") will be held on Monday, March 3, 1997 at 3:00 p.m. at the Decathlon
Athletic Club, 7800 Cedar Avenue South, Bloomington, Minnesota.
The items of business are:
1. To decrease the number of members of the Board of Directors
from eight to seven;
2. To elect seven directors to hold office until the next Annual
Meeting of Shareholders or until their successors are duly
elected and qualified;
3. To consider and act upon a proposal to ratify the appointment
of KPMG Peat Marwick LLP as independent auditors of the
Company for the fiscal year ending September 30, 1997; and
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record as shown on the books of the Company at the
close of business on January 15, 1997 will be entitled to vote at the meeting
and any adjournment thereof.
THIS NOTICE, THE PROXY STATEMENT, AND THE ENCLOSED FORM OF PROXY ARE
SENT TO YOU BY ORDER OF THE BOARD OF DIRECTORS.
/s/ Robert L. Hoffman
Robert L. Hoffman,
SECRETARY
Date: February 3, 1997
Minnetonka, Minnesota
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
FORM OF PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND IN
PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN
PERSON IF THEY DESIRE.
AG-CHEM EQUIPMENT CO., INC.
5720 Smetana Drive
Minnetonka, Minnesota 55343
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MARCH 3, 1997
PROXY SOLICITED BY THE BOARD OF DIRECTORS
This Proxy Statement is furnished to the record holders of shares of
Common Stock of Ag-Chem Equipment Co., Inc. ("Ag-Chem" or the "Company"), a
Minnesota corporation, as of the close of business on January 15, 1997, by order
of the Board of Directors. This Proxy Statement is furnished in connection with
the proxy solicitation by the Board of Directors for the Annual Meeting of
Shareholders to be held on Monday, March 3, 1997, at 3:00 p.m. at the Decathlon
Athletic Club, 7800 Cedar Avenue South, Bloomington, Minnesota. A shareholder
giving a Proxy may revoke it at any time prior to the commencement of the Annual
Meeting of Shareholders by filing written notice of the termination of the
appointment with an officer of the Company, by attending the Annual Meeting of
Shareholders and voting in person, or by filing a new written appointment of a
proxy with an officer of the Company. This Proxy Statement is expected to be
first mailed to shareholders on or about February 3, 1997.
The Annual Meeting of Shareholders has been called for the purpose of
decreasing the number of members of the Board of Directors from eight to seven,
electing seven directors for a one-year term and ratifying the appointment of
KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal year
ending September 30, 1997. All properly executed Proxies received prior to
commencement of the meeting will be voted at the meeting. If a shareholder
directs how a Proxy is to be voted with respect to the business coming before
the meeting, the Proxy will be voted in accordance with the shareholder's
directions. If a shareholder does not direct how a Proxy is to be voted, it will
be voted FOR decreasing the number of directors from eight to seven, FOR
electing management's nominees as members of the Company's Board of Directors
and FOR ratifying the appointment by the Board of Directors of KPMG Peat Marwick
LLP as the Company's independent auditors for the fiscal year ending September
30, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on January 15, 1997, the record date for the
Annual Meeting of Shareholders, there were 9,695,768 shares of Common Stock
outstanding. The Company's only authorized and outstanding class of stock is
Common Stock. Each share of Common Stock is entitled to one vote on each matter
properly coming before the meeting. Cumulative voting for directors is not
permitted. Abstentions and broker non-votes (brokers failing to vote shares of
the Company's Common Stock held in nominee name for customers by proxy) will be
treated as present at the meeting for purposes of determining the existence of a
quorum. With respect to any matter brought to a vote at the meeting, abstentions
will be treated as shares entitled to vote and broker non-votes will be treated
as shares not entitled to vote.
A list of those shareholders entitled to vote at the Annual Meeting of
Shareholders will be available for a period of ten days prior to the meeting for
examination by any shareholder at the Company's principal executive offices,
5720 Smetana Drive, Minnetonka, Minnesota, and will also be available at the
Annual Meeting of Shareholders.
ELECTION OF DIRECTORS
(PROPOSALS #1 AND #2)
The Bylaws of the Company provide that at each annual meeting the
shareholders shall determine the number of directors for the ensuing year;
provided, however, that the number may be increased by resolution of the Board
of Directors. The number of directors is currently set at eight. The Board of
Directors recommends that the number of directors be decreased to seven for the
coming year and that the nominees named below be elected. Each Director is
elected to serve a one-year term. Directors being elected at this Annual Meeting
of Shareholders will serve until the next Annual Meeting of Shareholders, or
until their successors have been duly elected and qualified.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or by proxy at the meeting and entitled
to vote is required for approval of the proposal to decrease the number of
directors from eight to seven and for approval of the proposal to elect
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR DECREASING THE NUMBER OF
DIRECTORS FROM EIGHT TO SEVEN AND FOR ELECTING THE NOMINEES FOR DIRECTOR SET
FORTH BELOW.
All nominees have consented to serve if elected, but if any becomes
unable to serve, the persons named as proxies may exercise their discretion to
vote for a substitute nominee. The name, age, offices held with the Company,
initial year of service as a director and description of business experience for
each nominee are as follows:
<TABLE>
<CAPTION>
Name Age Company Position Director Since
---- --- ---------------- --------------
<S> <C> <C> <C>
Alvin E. McQuinn 65 Chairman of the Board, Chief 1963
Executive Officer, President,
Director of Marketing and
Director
John C. Retherford 45 Senior Vice President, 1987
Chief Financial Officer and
Director
Robert L. Hoffman 68 Secretary and Director 1963
Vaughn O. Sinclair (1) (2) 68 Director 1968
G. Waddy Garrett (1) 55 Director 1983
Mary M. Jetland 35 Vice President of Manufacturing 1994
and Corporate Services and
Director
A.J. (Al) Giese (2) 48 Director 1996
</TABLE>
- --------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
ALVIN E. MCQUINN has served as a Director and as Chairman of the Board
since 1963. From 1963 to 1976, and since 1988, Mr. McQuinn has served as the
Company's President. He has served as Chief Executive Officer and Director of
Marketing since 1976. Mr. McQuinn serves as the Chairman of the Board and Chief
Executive Officer of Soil Teq, Inc.; as President, Chief Executive Officer and a
Director of Lor*Al Products, Inc., Ag-Chem Equipment Canada, Ltd. and Ag-Chem
Equipment Co., International Corp.; and as a Supervisory Director of Kurstjens
Terra-Gator, B.V., all of which are subsidiaries of the Company. Mr. McQuinn is
the father of Mary M. Jetland.
JOHN C. RETHERFORD has served as Senior Vice President and Chief
Financial Officer since March 1994, as Vice President of Finance from 1986 to
March 1994 and as a Director since 1987. Mr. Retherford is also a Director and
Vice President of Lor*Al Products, Inc., Ag-Chem Equipment Canada, Ltd. and
Ag-Chem Equipment Co., International Corp.; Vice President, Treasurer and
Secretary of Soil Teq, Inc.; and a Supervisory Director of Kurstjens
Terra-Gator, B.V.
ROBERT L. HOFFMAN has served as a Director and the Secretary of the
Company since 1963. Mr. Hoffman has been an attorney with, and a shareholder of,
the law firm of Larkin, Hoffman, Daly & Lindgren, Ltd., since 1958. He is also a
Director of Rimage Corporation and NetCo Communications Corporation.
VAUGHN O. SINCLAIR has served as a Director of the Company since 1968.
He served as President and General Manager of Watonwan Farm Services Co. from
1953 to 1991. Mr. Sinclair is a Director of Citizens State Bank (St. James,
Minnesota), and served as a Director of Nationwide Mutual Insurance Company and
Employers Mutual of Wausau from 1988 to 1994. He also served as the Chairman of
the Board of Directors of Farmland Mutual Insurance Company from 1972 to 1994.
Mr. Sinclair currently works as a consultant to cooperative organizations.
G. WADDY GARRETT has served as a Director of the Company since 1983.
Since 1978, he has served as the Chief Executive Officer and Chairman of the
Board of Alliance Agronomics, Inc., a holding company consisting of various
companies engaged in manufacturing, distribution and the custom application of
fertilizer. Mr. Garrett is also a Director of Container Corporation of Carolina,
Inc., Reed Jewelers, Inc., Willard Chemical, Inc., Smart Routes, Inc., Plant
Food Products, Inc. and County Bank of Chesterfield.
MARY M. JETLAND has served as Vice President of Manufacturing since
March 1995, and as Vice President of Corporate Services and a Director of the
Company since February 1994. From 1989 to February 1994, she served as the
Manager of Corporate Services of the Company. Ms. Jetland is also a Director of
Soil Teq, Inc. Ms. Jetland is the daughter of Alvin E. McQuinn.
A.J. (AL) GIESE has been a Director of the Company since 1996. Since
1980, Mr. Giese has served as Vice President, and most recently as Senior Vice
President, of Cenex/Land O'Lakes Agronomy Company, a major marketer of crop
inputs. Mr. Giese is a member of the Board of Directors and serves on the
Executive Committee of The Fertilizer Institute, Washington, D.C., an industry
trade association representing approximately 90 percent of domestic fertilizer
producers, manufacturers, retailers, trading firms and equipment manufacturers.
Mr. Giese also is a member of the Board of Directors of the International
Fertilizer Development Center, Muscle Shoals, Alabama.
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended September 30, 1996, the Board of Directors
held five meetings and took action by unanimous written consent on four
occasions. None of the members of the Board of Directors proposed for
re-election attended less than 75% of the meetings of the Board of Directors and
Committees of the Board of Directors held during the period in which they served
as a director in the fiscal year ended September 30, 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has appointed two standing committees: (i) the
Audit Committee and (ii) the Compensation Committee.
The purpose of the Audit Committee is to recommend the appointment of
the Company's independent auditors, review the scope of the audit, examine the
auditors' reports, make appropriate recommendations to the Board of Directors as
a result of such review and examination, and make inquiries into the
effectiveness of the financial and accounting functions and controls of the
Company. The Audit Committee held three meetings during the fiscal year ended
September 30, 1996.
The Compensation Committee is responsible for considering, negotiating,
establishing and modifying the compensation of the officers of the Company. Its
recommendations are subject to approval of the Board of Directors. The
Compensation Committee held two meetings during the fiscal year ended September
30, 1996.
REPORTING UNDER SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires executive officers and directors of the Company, and persons who
beneficially own more than 10 percent of the Company's outstanding shares of
Common Stock, to file initial reports of ownership and reports of changes in
ownership of securities of the Company with the Securities and Exchange
Commission ("SEC") and the Nasdaq Stock Market. Officers, directors and persons
owning more than 10 percent of the Company's outstanding Common Stock are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms filed. Based solely on a review of the copies of such reports and
amendments thereto furnished to or obtained by the Company or written
representations that no other reports were required, the Company believes that
during the fiscal year ended September 30, 1996, all filing requirements
applicable to its directors, officers or beneficial owners of more than 10
percent of the Company's outstanding shares of Common Stock were complied with,
except that Mr. Giese failed to timely file an initial report of ownership and
Mr. James J. Malanaphy, who resigned from the Board of Directors effective
January 31, 1997, failed to timely report one transaction.
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned for services
rendered in all capacities to the Company during the Company's fiscal years
ended September 30, 1994, 1995 and 1996 by Alvin E. McQuinn, President and Chief
Executive Officer, and John C. Retherford, Senior Vice President and Chief
Financial Officer. The Company has no other executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------------------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation(1) Compensation
- -------------------------------- -------- ---------- ------------- --------------- ---------------
($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Alvin E. McQuinn 1996 309,000 0 129,780 250,000(2)
President and 1995 300,000 400,000 135,000 250,000(2)
Chief Executive Officer 1994 290,000 500,000 130,500 --
John C. Retherford 1996 134,000 75,000 56,280 --
Senior Vice President 1995 130,000 125,000 58,500 --
and Chief Financial Officer 1994 120,000 150,000 54,000 --
</TABLE>
- ---------------------------------
(1) Represents profit sharing contributions made by the Company on the
executive officer's behalf.
(2) Represents payments made pursuant to Chairman's Annual Performance
Incentive Plan.
COMPENSATION OF DIRECTORS
During the fiscal year ended September 30, 1996, the Company paid each
director who was not an employee of the Company a director's fee of $3,000 per
meeting of the Board of Directors and $500 per committee meeting, except for
Robert L. Hoffman, who was not paid any such fees. In addition, the Company paid
each outside director an annual retainer of $5,000
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") has responsibility for all
elements of compensation of Ag-Chem officers, including the executive officers
named in the Summary Compensation Table. These elements consist of base salary,
profit sharing and incentive bonus. The Committee is also responsible for
setting the profit threshold for the Company's Profit Sharing Plan. The
Committee is comprised of two outside directors, Vaughn O. Sinclair and A.J.
(Al) Giese, who are not officers or employees of Ag-Chem or its subsidiaries and
who are not eligible to participate in any of the plans or programs that the
Committee administers. The Committee makes recommendations on compensation
issues which are subject to the approval of the Board of Directors.
Compensation Philosophy
The Company has a "pay for performance" philosophy for its management
employees including officers. Compensation is dependent upon the annual and
long-term financial performance of the Company, as well as long-term shareholder
return. The Committee has established programs to provide a total compensation
package that will attract highly qualified personnel to Ag-Chem, motivate
individuals to perform at optimum levels, reward outstanding individual
performance and retain valuable employees. The Company's compensation plans
provide significant cash incentives to the Company's management. The Company
does not have any stock option or long-term incentive plans.
Base Salary and Incentive Bonus
Salaries of the Company's management employees are based in part on the
compensation practices of other companies. The Committee has an independent
consulting firm review the total compensation of the officers to assess the
competitiveness of the Company's compensation program. The Company compares
itself to similarly-sized manufacturing companies located in the Midwest Region
of the United States. There are currently seven companies in this comparison
group, which is subject to change as the result of developments in the business
of the Company or the companies in the comparison group. The Company's most
direct competitors for executive personnel are not necessarily the companies
that would be included in a peer group established to compare shareholder
returns. Thus, the compensation peer group is not the same as the peer group
utilized in the Comparative Stock Performance Graph included in this Proxy
Statement. Salaries established by the Committee are also based on the officer's
scope of responsibilities, level of experience and individual performance.
Officers have an annual incentive bonus opportunity with awards based on overall
performance of the Company. The purpose of this incentive is to tie a
significant portion of annual pay directly to financial results.
Profit Sharing
The purpose of the Company's Profit Sharing Plan is to encourage
employees to work in a manner, and suggest ideas, that will increase Company
profit. Profit sharing compensation varies and is based on pre-tax profits. If
the Company obtains an acceptable profit level (the "threshold"), then the
Company pays profit sharing compensation to all eligible employees. The
Committee annually sets the profit threshold for the Company and its
subsidiaries. Any increase in the threshold is based on the net income of the
previous year.
Compensation of the Chairman and Chief Executive Officer
The compensation of Alvin E. McQuinn, Chairman of the Board and Chief
Executive Officer, is determined by the same process used for the other officers
of the Company. The only difference is that a higher portion of Mr. McQuinn's
total compensation is variable and at risk by being tied to the Company's
performance. The compensation paid to Mr. McQuinn is also based on subjective
non-financial Company performance measures which include continued growth,
customer satisfaction, management succession and overall quality of the Company.
In the fiscal year ended September 30, 1996, Mr. McQuinn received a
base salary of $309,000, a bonus of $250,000 under the Chairman's Annual
Performance Incentive Plan and a profit sharing contribution of $129,780. Mr.
McQuinn did not receive a discretionary bonus. The bonus paid to Mr. McQuinn
under the Chairman's Annual Performance Incentive Plan is based on the financial
performance of the Company and was determined by an independent consulting firm
engaged by the Company to evaluate compensation paid to other chief executive
officers in the Company's industry and to make recommendations regarding
compensation. The determination not to pay Mr. McQuinn a discretionary bonus was
based on both financial and non-financial factors. Such determination was made
by the Compensation Committee and approved by the Company's Board of Directors.
The total bonus paid to Mr. McQuinn for 1996 was significantly less than the
bonuses paid to him for the fiscal years ended September 31, 1994 and 1995. This
is due primarily to the fact that the Company's financial performance during the
fiscal year ended September 30, 1996 did not reach the levels achieved in prior
fiscal years.
Discussion of Corporate Tax Deduction on Compensation in Excess of $1,000,000
Per Year
As part of its responsibilities, the Committee reviews certain measures
of performance for the Company's Chairman of the Board and Chief Executive
Officer that it believes are critical to the overall performance of the Company.
Certain measures of performance, such as succession planning and strategic
planning, are vital to the long-term performance of the Company. Section 162(m)
of the Internal Revenue Code of 1986 (the "Code") prohibits the Company from
deducting as compensation expense amounts exceeding $1,000,000 per year for
certain officers, unless the payment of such compensation is based on
pre-established objective performance goals approved by the Company's
shareholders. A significant portion of the Chairman of the Board and Chief
Executive Officer's compensation meets the Code's requirement for deductibility.
At the Annual Meeting of Shareholders held in 1995 shareholders approved the
"Chairman's Annual Performance Incentive Plan." The Company believes that
amounts payable to the Chairman of the Board and Chief Executive Officer under
that plan are deductible. A portion of the Chairman of the Board and Chief
Executive Officer's compensation, however, will continue to be based on
critical, subjective measures that may prohibit certain compensation from being
deductible under the Code. The Committee strongly believes that its ability to
evaluate the performance of the Chairman of the Board and Chief Executive
Officer on vital subjective performance measures outweighs the Code's limitation
on such deductibility.
The foregoing Compensation Committee Report shall not be deemed
incorporated by reference by any statement incorporating by reference this Proxy
Statement, or any portion thereof, into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934 and shall not otherwise be
deemed filed under such Acts.
Vaughn O. Sinclair
A.J. (Al) Giese
Ag-Chem Equipment Co., Inc. Compensation Committee
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Robert L. Hoffman, a member of the Company's Board of Directors and its
Secretary, is an attorney with, and a shareholder of, the law firm of Larkin,
Hoffman, Daly & Lindgren, Ltd., which currently serves as legal counsel to the
Company and served as legal counsel to the Company during the fiscal year ended
September 30, 1996.
The Company has transactions in the ordinary course of business with
unaffiliated corporations of which certain of the non-employee directors are
officers. The Company does not consider the amounts involved in such
transactions material in relation to its business and believes that any such
amounts are not material in relation to the business of such other corporations
or the interests of the non-employee directors involved.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return,
assuming $100 invested on October 1, 1991, as if such amount had been invested
in each of: (i) the Company's Common Stock; (ii) the stocks comprising the Dow
Jones Industrial Sector-Heavy Machinery; and (iii) the stocks included in the
Dow Jones Industrial Average. The graph assumes the reinvestment of all
dividends (the Company has never paid a dividend). Prices of the Company's
Common Stock are based upon high closing bid prices in the Minneapolis-St. Paul
local over-the-counter market as reported by: (i) Metro Data Company (for the
period October 1, 1991 through April 21, 1995) and (ii) Nasdaq National Market
System (for the period April 24, 1995 through September 30, 1995).
The historical stock price performance of the Company's Common Stock
shown below is not necessarily indicative of future performance. The graph below
shall not be deemed incorporated by reference by any statement incorporating by
reference this Proxy Statement, or any portion thereof, into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934 and
shall not otherwise be deemed filed under such Acts.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
10/1/91 9/30/92 9/30/93 9/30/94 9/29/95 9/29/96
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ag-Chem Equipment Co., Inc. 100.00 115.79 244.76 381.58 1284.21 705.26
- --------------------------------------------------------------------------------------------------------------------
Dow Jones Industrial Sector
Heavy Machinery 100.00 101.03 161.08 196.27 223.01 306.27
- --------------------------------------------------------------------------------------------------------------------
Dow Jones Industrial Average 100.00 111.67 124.93 138.79 177.69 223.23
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of January 15, 1997, the number of
shares of Common Stock beneficially owned: (i) by each person known by the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock; (ii) by each director and director-nominee of the Company; and
(iii) by all executive officers and directors of the Company as a group. Unless
otherwise indicated, each of the following persons has sole voting and
investment power with respect to the shares of Common Stock set forth opposite
their respective names.
<TABLE>
<CAPTION>
Number of Shares Beneficially Owned
Name and Address -------------------------------------------------------
of Beneficial Owner Shares Percent
- ------------------------------------------ --------------------- ----------------------
<S> <C> <C>
Alvin E. McQuinn 5,722,498(1) 59.0%
5720 Smetana Drive
Minnetonka, Minnesota 55343
John C. Retherford 87,600(2) *
5720 Smetana Drive
Minnetonka, Minnesota 55343
Robert L. Hoffman 5,458,498(1) 56.3%
7900 Xerxes Avenue South
Suite 1500
Bloomington, Minnesota 55431
Vaughn O. Sinclair 40,200(3) *
1009 - 12th Avenue North
St. James, Minnesota 56081
James J. Malanaphy(4) 329,711 3.3%
1384 South River Road
Buffalo City, Wisconsin 54622
G. Waddy Garrett 26,000(5) *
7104 Mechanicsville Turnpike
Suite 217
Mechanicsville, Virginia 23111
Mary M. Jetland 31,100(6) *
5720 Smetana Drive
Minnetonka, Minnesota 55343
A.J. (Al) Giese 3,000(7) *
P.O. Box 64089
St. Paul, Minnesota 55164
All directors and executive 6,245,301 64.4%
officers as a group (eight persons)
</TABLE>
- ----------------------------------
(SEE NOTES ON FOLLOWING PAGE.)
* Less than 1%
(1) Includes 5,453,298 shares owned by the Alvin E. McQuinn Revocable Trust
of which Mr. McQuinn and Mr. Hoffman are trustees.
(2) Includes 6,934 shares held of record by Mr. Retherford's minor
children. Also includes 4,016 shares held of record by a minor relative
of Mr. Retherford and 4,400 shares owned of record by a trust of which
Mr. Retherford is a trustee, all of which Mr. Retherford disclaims
beneficial ownership.
(3) Includes 200 shares held of record by Mr. Sinclair's spouse, of which
Mr. Sinclair disclaims beneficial ownership.
(4) Mr. Malanaphy has resigned from the Company's Board of Directors,
effective January 31, 1997.
(5) Includes 6,000 shares held of record by Mr. Garrett's spouse, 800
shares held of record by Mr. Garrett's children and 4,000 shares held
of record by the Profit Sharing Plan of a corporation of which Mr.
Garrett is an affiliate of which Mr. Garrett disclaims beneficial
ownership.
(6) Includes 14,000 shares held of record by Ms. Jetland's spouse and 100
shares held of record by Ms. Jetland's children, of which Ms. Jetland
disclaims beneficial ownership.
(7) Includes 3,000 shares held jointly with Mr. Giese's spouse.
INDEPENDENT AUDITORS
(PROPOSAL #3)
The Board of Directors has appointed KPMG Peat Marwick LLP to serve as
the Company's independent auditors for the fiscal year ending September 30,
1997, and to perform other accounting services. Representatives of KPMG Peat
Marwick LLP will be present at the Annual Meeting of Shareholders, with the
opportunity to make a statement if they so desire and to respond to appropriate
shareholder questions.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or by proxy at the annual meeting and
entitled to vote is required to ratify the appointment of KPMG Peat Marwick LLP
as the Company's independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFYING THE APPOINTMENT
OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
SUBMISSION OF SHAREHOLDER PROPOSALS
The rules of the Securities and Exchange Commission permit shareholders
of the Company, after notice to the Company, to present proposals for
shareholder action in the Company's Proxy Statement where such proposals are
consistent with applicable law, pertain to matters appropriate for shareholder
action, and are not properly omitted by Company action in accordance with the
proxy rules published by the Securities and Exchange Commission. Proposals that
shareholders may wish to present at the next Annual Meeting of Shareholders in
1998 must be received by the Company prior to October 8, 1997 to be included in
the Proxy Statement and form of Proxy relating to that meeting.
OTHER PROPOSALS
The Board of Directors of the Company does not intend to present any
business at the meeting other than the matters specifically set forth in this
Proxy Statement and knows of no other business to come before the meeting. If,
however, any other matters should properly come before the meeting, it is the
intention of the persons named in the Proxy to vote the shares represented
thereby in accordance with their best judgment on such matters.
COSTS AND METHOD OF SOLICITATIONS
Solicitations of proxies will be made by preparing and mailing the
Notice of Annual Meeting, form of Proxy and Proxy Statement to shareholders of
record as of the close of business on January 15, 1997. The cost of making the
solicitation includes the cost of preparing and mailing the Notice of Annual
Meeting, form of Proxy and Proxy Statement, and the payment of charges incurred
by brokerage houses and other custodians, nominees and fiduciaries for
forwarding documents to shareholders. In certain instances, officers of the
Company may make special solicitations of proxies either in person or by
telephone. Expenses incurred in connection with special solicitations are
expected to be nominal. The Company will bear all expenses incurred in
connection with the solicitation of proxies for the annual meeting.
It is important that your shares are represented and voted, whether or
not you plan to attend the meeting. Accordingly, we respectfully request that
you sign, date and mail the enclosed Proxy in the enclosed envelope as promptly
as possible. Thank you.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert L. Hoffman
Robert L. Hoffman,
SECRETARY
Date: February 3, 1997
AG-CHEM EQUIPMENT CO., INC. [FRONT] PROXY
5720 SMETANA DRIVE
MINNETONKA, MINNESOTA 55343
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Alvin E. McQuinn and Robert L. Hoffman, and each
of them with full power of substitution, Proxies to represent and vote, as
designated below, all of the shares of the Common Stock of Ag-Chem Equipment
Co., Inc., registered in the name of the undersigned as of the close of business
on January 15, 1997, with the powers the undersigned would possess if personally
present at the Annual Meeting of Shareholders to be held at the Decathlon
Athletic Club, 7800 Cedar Avenue South, Bloomington, Minnesota, at 3:00 p.m. on
March 3, 1997, and at any adjournment thereof, hereby revoking any proxy or
proxies previously given.
1. Proposal to decrease the number of directors
from eight to seven:
|_| FOR |_| AGAINST |_| ABSTAIN
2. Election of directors:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed
below) below
(To WITHHOLD authority to vote for any individual nominee, draw a line
through the nominee's name below)
ALVIN E. MCQUINN JOHN C. RETHERFORD ROBERT L. HOFFMAN
A. J. (AL) GIESE VAUGHN O. SINCLAIR G. WADDY GARRETT
MARY M. JETLAND
(CONTINUED, AND TO BE COMPLETED AND SIGNED ON THE REVERSE SIDE)
- -------------------------------------------------------------------------------
(CONTINUED FROM THE OTHER SIDE)
[BACK]
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending September
30, 1997:
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion, the appointed Proxies are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Dated ________________________________, 1997
___________________________________________
(Signature)
___________________________________________
(Second signature)
PLEASE DATE AND SIGN ABOVE exactly as your
name appears at left, indicating where
appropriate, official position or
representative capacity.
